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21.
All else equal, the market value of a stock will tend to decrease by roughly
the aftertax value of the dividend on the:
22.
Which one of the following statements related to dividend policy is correct?
23.
Automatic dividend reinvestment plans:
I. require that stockholders reinvest all of the dividends to which they are
entitled.
II. sometimes grant shareholders the privilege of purchasing additional
shares at a discounted price.
III. help shareholders create their own homemade dividend policies.
IV. help make corporate dividend policies irrelevant to individual
stockholders.
24.
Which of the following tends to increase the ability of a shareholder to
create his or her own homemade dividend policy?
I. low taxes on capital gains
II. dividend reinvestment plans
III. large holdings of shares
IV. low cost equity purchases
25.
Which one of the following favors a low dividend policy?
26.
The fact that flotation costs can be significant is an argument for:
27.
Which of the following tend to keep dividends low?
I. shareholders desiring current income
II. terms contained in bond indenture agreements
III. the desire to maintain constant dividends over time
IV. flotation costs
28.
Which of the following shareholders tend to favor a high dividend policy?
I. retired individuals
II. endowment funds
III. corporate investors
IV. investors with high dividend tax rates but low capital gains tax rates
29.
An investor is more likely to prefer a high dividend payout if a firm:
30.
The information content of a dividend increase generally signals that:
31.
S.L. Moffatt, Inc. has paid a quarterly dividend of $1.20 per share for the
last ten quarters. Which one of the following is most apt to cause the firm to
reduce the amount of its next dividend payment?
32.
The dividend market is in equilibrium when:
33.
Which one of the following statements related to stock repurchases is
correct?
34.
Which one of the following statements related to stock repurchases is
correct?
35.
A stock repurchase program:
36.
Which one of the following is a result of a stock repurchase?
37.
If you ignore taxes and costs, a stock repurchase will:
I. reduce the total assets of a firm.
II. decrease the earnings per share.
III. reduce the PE ratio more so than an equivalent stock dividend.
IV. reduce the total equity of a firm.
38.
Steve owns 3,000 shares of NOP, Inc. stock, which he purchased six years
ago at a price of $22 a share. Today, these shares are selling for $68 each.
Assume the current tax laws are such that Steve is subject to a tax rate of
25 percent on both his dividend income and his capital gains. From Steve's
point of view, a stock repurchase today: (Ignore costs)
39.
Which one of the following statements correctly applies to U.S. industrial
firms based on the period of 1984-2004?
40.
Which one of the following statements appears to be supported by the
current dividend policies of U.S. industrial firms?
