MBA
MKT 640 / MKT640
DIVIDEND POLICIES
Question 1
If a firm is taxed at 40% and an individual is in the 15% dividend tax bracket what is the total
amount per $1 of earnings an investor receives as a result of a double taxation environment?
(round to the hundredth) .
$0.51
Question 2
A _____ is intended to be paid periodically in equal amounts recurring over time.
liquidating dividend
extra dividend
special dividend
regular dividend
Question 3
A stable dividend policy should not mean ______ but instead payments that are____.
fixed payments - growing at a stable rate
fixed payments - paid at a stable rate
timely payments - paid at a stable rate
variable payments - paid at a stable rate
Question 4
Investors who are concerned with how a firm manages retained earnings would encourage which
dividend policy?
a policy that aims to achieve the lowest payout possible
stable dividend policy
a policy that aims to achieve the highest payout possible
target payout ratio
Question 5
, If a firm has _____ flotation costs they will be _____ to issue dividends.
variable – more likely
high - less likely
high – more likely
low - less likely
Question 1
A _____ is intended to be paid periodically in equal amounts recurring over time.
liquidating dividend
special dividend
regular dividend
common dividend
Question 2
Which of the following is not a common way for firms to distribute earnings?
repurchase shares from employee plans
make capital expenditures
repurchase shares on the market
pay earnings to shareholders in the form of dividends
Question 3
If a firm _____ their dividend policy the market will _____. (choose 2)
negatively alters – respond positively
eliminates – respond positively
eliminates – respond negatively
positively alters – respond positively
Question 4
The Firm is financed with 40% debt 60% equity. If they are expecting a capital expense of
$600,000 over the next year what should be amount distributed as dividends when using the
residual dividend approach. (round to whole dollar) .
240,000
MKT 640 / MKT640
DIVIDEND POLICIES
Question 1
If a firm is taxed at 40% and an individual is in the 15% dividend tax bracket what is the total
amount per $1 of earnings an investor receives as a result of a double taxation environment?
(round to the hundredth) .
$0.51
Question 2
A _____ is intended to be paid periodically in equal amounts recurring over time.
liquidating dividend
extra dividend
special dividend
regular dividend
Question 3
A stable dividend policy should not mean ______ but instead payments that are____.
fixed payments - growing at a stable rate
fixed payments - paid at a stable rate
timely payments - paid at a stable rate
variable payments - paid at a stable rate
Question 4
Investors who are concerned with how a firm manages retained earnings would encourage which
dividend policy?
a policy that aims to achieve the lowest payout possible
stable dividend policy
a policy that aims to achieve the highest payout possible
target payout ratio
Question 5
, If a firm has _____ flotation costs they will be _____ to issue dividends.
variable – more likely
high - less likely
high – more likely
low - less likely
Question 1
A _____ is intended to be paid periodically in equal amounts recurring over time.
liquidating dividend
special dividend
regular dividend
common dividend
Question 2
Which of the following is not a common way for firms to distribute earnings?
repurchase shares from employee plans
make capital expenditures
repurchase shares on the market
pay earnings to shareholders in the form of dividends
Question 3
If a firm _____ their dividend policy the market will _____. (choose 2)
negatively alters – respond positively
eliminates – respond positively
eliminates – respond negatively
positively alters – respond positively
Question 4
The Firm is financed with 40% debt 60% equity. If they are expecting a capital expense of
$600,000 over the next year what should be amount distributed as dividends when using the
residual dividend approach. (round to whole dollar) .
240,000
