Question : 52.Factors that influence the market’s reaction to dividend policy do : 1325753

 

 

52.Factors that influence the market’s reaction to dividend policy do not include

a.the current level of a firm’s dividends.

b.the volatility of the dividend stream over time.

c.the income tax that investors must pay when they receive dividends.

d.the historical level of dividends paid.

 

 

 

 

53.Which of the following are methods to distribute cash to shareholders?

a.cash dividends

b.stock dividends

c.share repurchases

d.both (a) and (c)

 

 

 

54.CashOut, Inc. has a current share price of $50. If CashOut plans to pay a $1 dividend, then if we ignore the effect of taxes we would expect the price of CashOut shares to change by what amount on the ex dividend date?

a.no change since prices will reflect dividend payments on the announcement date

b.a drop of $1

c.an increase of $1

d.no change since prices are not a function of cash paid to investors

 

 

 

55.Old Balance common stock has a par value totaling $12,000,000, additional paid-in-capital totaling $30,000,000 as well as retained earnings of $40,000,000. If Old Balance is located in a state where the most stringent capital-impairment restrictions exist, what is the maximum dividend that Old Balance could pay to its shareholders?

a.$82,000,000

b.$70,000,000

c.$40,000,000

d.$30,000,000

 

 

 

56.A firm may be legally prevented from paying dividends if

a.it has a debt obligation due within the next month.

b.its assets are greater than its liabilities.

c.it is legally insolvent.

d.it needs to save cash for projects.

 

 

 

57.You notice that a company has consistently paid a dividend of $.20 per quarter except for the quarter one year ago when it paid $.52 when it had an unusually high level of earnings that the company did not believe was going to be sustainable into the future. Such a pattern is most indicative of what kind of dividend policy?

a.constant payout ratio dividend policy

b.constant nominal payout dividend policy

c.target dividend payout ratio dividend policy

d.low-regular-and-extra policy dividend policy

 

 

 

58.Markus Needman, Inc. just paid a 30% stock dividend to its shareholders. If the price of the companies shares was $100 before the dividend, what should the price of the shares be now? If helpful, assume that the company had 500 shares outstanding before the stock dividend?

a.$100.00

b.$76.92

c.$70.00

d.none of the above

 

 

 

59.Banana Split Co. has had six 2-for 1 splits since you purchased one share for $2 seven years ago. If the current price per share is $20, what it the value of your investment?

a.$2,560

b.$1,280

c.$640

d.none of the above

 

 

 

60.If a firm is wanting to repurchase some of its shares from the market and wants to pay a uniform price for all of the shares, then what method would it most likely use?

a.open-market share repurchase

b.tender offer

c.executive option repurchase

d.none of the above

 

 

 

61.Which of the following firms is most likely to pay out a larger portion of their earnings to shareholders?

a.a small company

b.a mature company

c.a young company

d.a growth company