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Dividend Policy Quiz 3 (30 MCQs)

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1. The optimal capital structure means the ratio of capital sources at which the company's value reaches the maximum, which is the target capital structure that managers should strive to achieve for the benefit of shareholders.
2. The dividend payout ratio is equal to
3. Retained earnings are
4. Which of these sources of financing have the highest priority in case of financial trouble:
5. Which one of the following increases the number of shares outstanding but does not increase the value of owner's equity?
6. Providing financing to high-risk new private companies is
7. On May 7, Melbourne Mining declared a $ .50-per-share quarterly dividend payable June 28 to stockholders of record on Friday, June 7. What is the latest date by which you could purchase the stock and still get the recently declared dividend?
8. The relevance theory of dividend was supported by:
9. An established company is generally liquid and not able to pay large amount of dividend.
10. A portion of the company's profits that is distributed is called
11. Dividends are payable
12. Dividend policy is determined by the:
13. In a process of insolvency, creditors may ask the company to restrict the payment of cash dividends until a certain level of profits are earned, or to limit the amount of dividend, to a certain percentage of earnings.
14. Which of the theories say that dividend is relevant in determining MP of Share
15. Discuss the relationship between dividend policy and stock price.
16. Because of the ..... stock dividends reduce the firm's ability to pay dividends in the future.
17. In Q.2 what is Market price of Equity share when dividend payout is 100 %
18. Explain the concept of constant dividend payout ratio policy with an example.
19. Which of the below is NOT the method of stock repurchase by a company
20. In Q.2 what is Net Profit for Equity Shareholders
21. Firm Pickemon, Inc. has had earnings of RM3.20, RM3.00, and RM5.50 per share for the past three years. The firm anticipates maintaining the same dividend policy this year as the past three years. That dividend policy has resulted in dividends per share of RM1.28, RM1.20, and RM2.20 for the past three years. It is anticipated that the next year will result in a large increase in earnings to RM9.80 per share. What dividend do you expect the firm to pay in the next year?
22. Investors own shares, but don't get dividends, what profits can the owner of these shares get?
23. To handle an IPO, the issuing company must pay a considerable management fee, said
24. In Q.2 what is Market price of Equity share when dividend payout is 50 %
25. "The size of the dividend payment has no influence on investors"
26. Dividend can be distributed in which all forms
27. Constant payout ratio means:
28. The explicit or implicit decision of the Board of Directors regarding the amount of residual earnings (past or present) that should be distributed to the shareholders of the corporation is called .....
29. MM's second proposal contends that under the assumption of no corporate income tax, if the D/E ratio increases, the cost of equity capital remains unchanged.
30. The theory that asserts that corporate value has nothing to do with capital structure is
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