chap018

chap018 - Chapter 018 Dividends and Dividend Policy...

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Chapter 018 Dividends and Dividend Policy Multiple Choice Questions 1. A payment made out of a firm's earnings to its owners in the form of either cash or stock is called a: A . dividend. b. distribution. c. repurchase. d. payment-in-kind. e. stock split. SECTION: 18.1 TOPIC: DIVIDEND TYPE: DEFINITIONS 2. A payment made by a firm to its owners from sources other than current or accumulated retained earnings is called a: a. dividend. B . distribution. c. repurchase. d. payment-in-kind. e. stock split. SECTION: 18.1 TOPIC: DISTRIBUTION TYPE: DEFINITIONS 18-1
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Chapter 018 Dividends and Dividend Policy 3. A cash payment generally paid quarterly by a firm to its owners in the normal course of business is called a: a. repurchase. b. liquidating dividend. C . regular cash dividend. d. special dividend. e. extra cash dividend. SECTION: 18.1 TOPIC: REGULAR CASH DIVIDEND TYPE: DEFINITIONS 4. The declaration date is the date on which the: a. holders of record are determined for a dividend payment. b. stock begins selling without entitlement to an upcoming dividend payment. C . board of directors passes a resolution to pay a dividend. d. dividend checks are mailed. e. bank trustee approves a dividend payment. SECTION: 18.1 TOPIC: DECLARATION DATE TYPE: DEFINITIONS 5. The ex-dividend date is defined as _____ business days before the date of record. a. 1 B . 2 c. 3 d. 5 e. 10 SECTION: 18.1 TOPIC: EX-DIVIDEND DATE TYPE: DEFINITIONS 18-2
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Chapter 018 Dividends and Dividend Policy 6. The date by which a shareholder must be recorded as the share owner in order to receive a declared dividend is called the: a. ex-rights date. b. ex-dividend date. C . date of record. d. date of payment. e. declaration date. SECTION: 18.1 TOPIC: DATE OF RECORD TYPE: DEFINITIONS 7. The date the dividend payments are mailed is called the: a. ex-rights date. b. ex-dividend date. c. date of record. D . date of payment. e. declaration date. SECTION: 18.1 TOPIC: DATE OF PAYMENT TYPE: DEFINITIONS 8. The ability of shareholders to undo a firm's dividend policy and create an alternative dividend policy by reinvesting dividends or selling shares of stock is called (a): a. perfect foresight model. b. personalization. c. capital structure irrelevancy. d. homemade leverage. E . homemade dividend policy. SECTION: 18.2 TOPIC: HOMEMADE DIVIDEND POLICY TYPE: DEFINITIONS 18-3
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Chapter 018 Dividends and Dividend Policy 9. The market's reaction to a change in a firm's dividend payout is referred to as the: A . information content effect. b. clientele effect. c. efficient markets hypothesis. d. distribution effect. e. dividend fallout. SECTION: 18.5 TOPIC: INFORMATION CONTENT EFFECT TYPE: DEFINITIONS 10. The observable fact that stocks attract particular investors based dividend yield and the resulting tax effects is called the: a. information content effect. B . clientele effect. c. efficient markets hypothesis. d. distribution effect.
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chap018 - Chapter 018 Dividends and Dividend Policy...

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