Dividend Policy Paper 3


When a company desires to increase the market value per share of common stock, the company will implement


Arch, Inc., has 200,000 shares of common stock outstanding. Net income for the recently ended fiscal year was $500,000, and the stock has a price- earnings ratio of eight. The board of directors has just declared a three-for-two stock split. For an investor who owns 100 shares of stock before the split, the approximate value (rounded to the nearest dollar) of the investment in Arch stock immediately after the split is


On August 15, National Corporation announced a 1-for-10 reverse split, the event to occur on September 6, subject to shareholder approval. The stock’s closing price on August 4 was $1.375. If nothing changes, at what price would you expect the stock to sell after the stock split is made effective on September 6?


XYZ Corp. has 1,000 shares outstanding and retained earnings of $25,000. Theoretically, what would you expect to happen to the price of XYZ stock, currently selling for $50 per share, if a 20% stock dividend is declared?


If a company uses the residual dividend policy, it will pay


Stock dividends and stock splits differ in that


If the capital gains were taxed at a lower rate than regular dividend income, then the the dividend payout percentage of a company, the , everything else equal. List A List B


On December , Charles Company’s board of directors declared a cash dividend of $1.00 per share on the 50,000 shares of common stock outstanding. The company also has 5,000 shares of treasury stock. Shareholders of record on December 15 are eligible for the dividend, which is to be paid on January 1. On December 1, the company should


A company following a residual dividend payout policy will pay higher dividends when, everything else equal, it has


The date when the right to a dividend expires is called the


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