Statements about dividend policies is correct

Assignment Help Financial Management

Reference no: EM131813143

1. Which of the following statements about dividend policies is correct?

A. One advantage of dividend reinvestment plans is that they allow shareholders to avoid paying taxes on the dividends that they choose to reinvest.

B. One key advantage of a residual dividend policy is that it enables a company to follow a stable dividend policy.

C. One reason that companies tend to avoid stock repurchases is that dividend payments are taxed at a lower rate than gains on stock repurchases.

D. The clientele effect suggests that companies should follow a stable dividend policy.

E. None of the above

2. Reuth, Inc. is splitting its stock 7-for-3. The pre-split stock price is $90.00 per share, and the firm believes that its total market value will increase by 7% as a result of improved liquidity that it thinks would follow the split. What is the stock's expected price following the split?

A. $13.76

B. $32.10

C. $41.27

D. $224.70

E. None of the above

Reference no: EM131813143

Questions Cloud

Corporate taxes-marginal tax rates on taxable income : What are Dakota’s average and marginal tax rates on taxable income?

Find the minimum score the instructor can set : Find the minimum score the instructor can set so that the probability that a student will pass just by guessing is 20% or less.

Probability-at least one healthy dog develop kennel cough : In spite of the requirement that all dogs boarded in a kennel be inoculated, the chance that a healthy dog boarded in a clean.

The spot market as opposed to direct quotes : Discuss why Australia uses an indirect quote system in the spot market as opposed to direct quotes.

Statements about dividend policies is correct : Which of the following statements about dividend policies is correct?

Expected number of diseased individuals in the group : Investigators need to determine which of 600 adults have a medical condition that affects 2% of the adult population.

Company follows residual dividend policy : Terrell Corp. has a capital budget of $6,000,000. If the company follows a residual dividend policy, what total dividends, if any, will it pay out?

Review problem related to an appliance store : An appliance store sells 20 refrigerators each week. Ten percent of all purchasers of a refrigerator buy an extended warranty.

Find the average number of cracked or broken eggs : The probability that an egg in a retail package is cracked or broken is 0.025. Find the average number of cracked or broken eggs in one dozen cartons.

User Account

All Pages