Ch16 - Ch16 Student: _ 1. Firms can pay out cash to their...

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Ch16 Student: ___________________________________________________________________________ 1. Firms can pay out cash to their shareholders in the following ways: I) Dividends II) Share repurchases III) Interest payments A. I only B. II only C. I and II only D. III only 2. Dividends are decided by: I) The managers of a firm II) The government III) The board of directors A. I only B. II only C. III only D. I and II only 3. Which of these dates occurs last in time (when arranged in the chronological order)? A. Payment date B. Ex-dividend date C. Record date D. Dividend declaration date 4. Which of the following lists events in the chronological order from earliest to latest? A. Record date, declaration date, ex-dividend date B. Declaration date, record date, ex-dividend date C. Declaration date, ex-dividend date, record date D. None of the above 5. On January 2, Michigan Mining declared a $25-per-share quarterly dividend payable on March 9 th to stockholders of record on February 9. What is the latest date by which you could purchase the stock and still get the recently declared dividend? A. February 5 B. February 6 C. February 7 D. February 8
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6. Which of the following dividends is never in the form of cash? I) Regular dividend II) Special dividend III) Stock dividend IV) Liquidating dividend A. I only B. II only C. III only D. I, II, and IV only 7. The following statements are true of dividend reinvestment plans (DRIPs): I) offered by the companies to their shareholders II) generally, new shares are issued at a discount III) the dividends are taxable as ordinary income A. I only B. I and II only C. I, II and III D. III only 8. Firms can repurchase shares in the following ways: I) Open market repurchase II) Through a tender offer III) Through a Dutch auction process IV) Through direct negotiation with a major shareholder A. I only B. II only C. III only D. I, II, III, and IV 9. Dutch auction process is the same as: A. discriminatory price auction B. uniform price auction C. English auction D. none of the above 10. The par value of the outstanding shares is defined as: A. Retained earnings B. Legal capital C. Book value of equity D. None of the above
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11. The procedure where the firm states a series of prices at which it is prepared to repurchase stock. Shareholders submit offers indicting how many shares they wish to sell at each price. The firm then calculates the lowest price at which it is able to buy the desired number of shares. This procedure is known as: A. Open market transaction B. Dutch auction C. Green mail D. None of the above 12. The most important difference between stock repurchases and cash dividends is that they: I) Benefit different groups II) Have different effects on corporate cash flow III) May have different tax consequences A. I only B. II only C. III only D. I, II, and III 13. Greenmail refers to the practice of a company purchasing its stock, usually at a high price, from: A. Small shareholders who are happy with performance of the firm
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Ch16 - Ch16 Student: _ 1. Firms can pay out cash to their...

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