Advanced Corporate Finance Test 3 (with Error-free Answers 100%)

Before the ________ date, a purchaser of stock is entitled to receive a declared dividend, but on or after that date they cannot. correct answers ex-dividend Which one of the following choices reports dividend events in the correct chronological order, from earliest to latest? correct answers Declaration date, ex-dividend date, date of record The ability of shareholders to undo the dividend policy of a firm and create an alternative dividend payment policy by reinvesting dividends or selling shares of stock is referred to as: correct answers homemade dividends. Which one of the following statements is true? correct answers Firms should never give up a positive NPV project to increase a dividend. If All-Star Fuel, a chain of gasoline stations, acquires Mid-States Refining, a refiner of oil products, the transaction would be an example of a: correct answers vertical acquisition. A merger in which an entirely new firm is created and both the acquired and acquiring firms cease to exist is called a: correct answers consolidation. The acquisition of a firm in the same industry as the bidder is called a _____ acquisition. correct answers horizontal The acquisition of a firm involved with a different stage of the production process than the bidder is called a _____ acquisition. correct answers vertical The acquisition of a firm whose business is not related to that of the bidder is called a _____ acquisition. correct answers conglomerate Stock Split correct answers Increases the number of outstanding shares of stock while making no change in shareholders equity Stock Repurchase correct answers Occurs when a firm repurchases its own shares Stock Dividend correct answers Payment of a dividend in the form of stock rather than cash. a stock dividend comes from treasury stock, increases the number of shares outstanding , and reduces the value of each share Regular Cash Dividend correct answers Cash Payment by a firm to its shareholders, usually four times a year Declaration date correct answers Date on which the board of directors passes a resolution to pay a dividend of a specified amount to all qualified holders of record on a specified date