This quiz works best with JavaScript enabled. Home > Corporate Finance > Dividend Policy – Quiz 6 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Dividend Policy Quiz 6 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. In retention growth method, percent of net income firms usually payout as shareholders dividend is classified as A) Payout ratio. B) Present value of ratio. C) Payback ratio. D) Growth retention ratio. Show Answer Correct Answer: A) Payout ratio. 2. Dividend is that part of profit after tax which is ..... to the ..... of the company A) Retained, shareholders. B) Distributed, company. C) Distributed, Shareholders. D) None of these. Show Answer Correct Answer: C) Distributed, Shareholders. 3. One of the condition stated in the loan contract is the firm can pay dividends when it has fully settled the loan principal. This example BEST describes the ..... of dividend policy. A) Legal constraints. B) Inflation. C) Liquidity and cash flow considerations. D) None of above. Show Answer Correct Answer: A) Legal constraints. 4. What are the factors that influence dividend policy? A) The factors that influence dividend policy include company profitability, cash flow, growth opportunities, tax considerations, and shareholder preferences. B) The number of employees who carpool to work. C) The color of the company logo. D) The CEO's favorite food. Show Answer Correct Answer: A) The factors that influence dividend policy include company profitability, cash flow, growth opportunities, tax considerations, and shareholder preferences. 5. To receive the upcoming dividend, shareholders must have bought the stock before the ..... A) Date of record. B) Announcement date. C) Ex dividend date. D) Payment date. Show Answer Correct Answer: C) Ex dividend date. 6. If the price of the securities sold falls during the underwriting period, the underwriter buys the stocks in the market to stabilize the price, which is an illegal price manipulation. A) Correct. B) Error. Show Answer Correct Answer: B) Error. 7. The company's annual operations have to pay? tax. Individuals who own company stocks and distribute dividends have to pay? tax. A) Company income; personal income. B) Personal income; company income. C) Double benefit; simple benefit. D) Overall; individual. E) Before tax; after tax. Show Answer Correct Answer: A) Company income; personal income. 8. Below that is not an activity of the company to financial management decisions is ..... A) Financing Activities. B) Investing Activities. C) Operating Activites. D) Production Activities. Show Answer Correct Answer: D) Production Activities. 9. If Ian O'Connor Enterprises, Inc., repurchased 50 percent of its outstanding common stock from the open (secondary) market, the result would be A) A decline in EPS. B) An increase in cash. C) A decrease in total assets. D) An increase in the number of stockholders. Show Answer Correct Answer: C) A decrease in total assets. 10. In Walter model formula, D stands for A) Dividend earning. B) Direct dividend. C) Indirect dividend. D) Dividend per share. Show Answer Correct Answer: D) Dividend per share. 11. Which of the following can be described as a measure of capital structure? A) Ratio of debt funds to equity funds. B) Liabilities/Assets. C) Liabilities/Equity. D) All of the above. E) Only a and c. Show Answer Correct Answer: D) All of the above. 12. Dividends are paid out of A) Accumulated profits. B) Profit after tax. C) General reserve. D) Gross profit. Show Answer Correct Answer: B) Profit after tax. 13. In Q.1 MP is highest when dividend payout is A) 50 %. B) 100 %. C) 25 %. D) Nil. Show Answer Correct Answer: D) Nil. 14. In order to calculate Weighted Average Cost of weights may be based on: A) Market values. B) Book values. C) Both. D) None. Show Answer Correct Answer: A) Market values. 15. Which is not the type of dividend payment? A) Bonus issue. B) Share split. C) Right issue. D) None of the above. Show Answer Correct Answer: B) Share split. 16. In Q.2 what is Earning per share A) Rs. 6. B) Rs. 10. C) Rs.4. D) None of these. Show Answer Correct Answer: A) Rs. 6. 17. What are the different types of dividend policies? A) No dividend policy. B) The different types of dividend policies include stable dividend policy, constant dividend payout ratio policy, residual dividend policy, and hybrid dividend policy. C) Variable dividend policy. D) Increasing dividend policy. Show Answer Correct Answer: B) The different types of dividend policies include stable dividend policy, constant dividend payout ratio policy, residual dividend policy, and hybrid dividend policy. 18. MM's first proposal asserts that under the assumption of no corporate income tax, the more debt a company borrows, the lower its value will be. A) True. B) Untrue. Show Answer Correct Answer: B) Untrue. 19. MM's third proposal contends that under the assumption of corporate income tax, if managers want to maximize the value of the company, they should not borrow more. A) True. B) Untrue. Show Answer Correct Answer: B) Untrue. 20. What is dividend policy? A) Dividend policy is the company's plan for borrowing money. B) Dividend policy is the company's strategy for marketing its products. C) Dividend policy refers to the approach or strategy that a company uses to determine how much of its earnings it will pay out to shareholders in the form of dividends. D) Dividend policy is the company's approach to managing its employees. Show Answer Correct Answer: C) Dividend policy refers to the approach or strategy that a company uses to determine how much of its earnings it will pay out to shareholders in the form of dividends. ← PreviousNext →Related QuizzesDividend Policy Quiz 1Dividend Policy Quiz 2Dividend Policy Quiz 3Dividend Policy Quiz 4Dividend Policy Quiz 5Dividend Policy Quiz 7Dividend Policy Quiz 8Capital Structure QuizWorking Capital Management Quiz 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books