23- Historically firm financial managers predominately feel that: a. dividends should be increased annually no matter what. b. the personal taxes of their shareholders must be their primary consideration when setting dividend policy. c. dividend smoothing is talked about but rarely affects dividend decisions. d. once a dividend is increased, it should not be decreased. e. dividends should be flexible and adjusted annually in response to changes in the firm's earnings

23- Historically firm financial managers predominately feel that: a. dividends should be increased annually no matter what. b. the personal taxes of their shareholders must be their primary consideration when setting dividend policy. c. dividend smoothing is talked about but rarely affects dividend decisions. d. once a dividend is increased, it should not be decreased. e. dividends should be flexible and adjusted annually in response to changes in the firm's earnings

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter15: Dividend Policy

Section: Chapter Questions

Problem 10QTD

See similar textbooks

Similar questions

which one is correct please confirm? QUESTION 32 Most states limit dividend policy by requiring that dividends ____. a. not be paid unless the firm generates net earnings during the most recent year b. not be paid when the firm is insolvent c. be paid out of the firm’s capital d. be paid only out of retained earnings
1) What is meant by the term 'dividend policy'?A) The desired pattern of dividends over time when a company determines the proportion of profits to be paid out to shareholders, usually done periodicallyB) The selection of specific groups of shareholders to receive dividends this yearC) The balance to be struck between paying interim dividends and final dividendsD) The determination of the dividend policies of industrial firms by government, designed to encourage earnings retention for investment
Which of the following situation in which the quality of the company’s pay-out to shareholders may decline a. Decrease in cash position b. Increase in positive NPV investment opportunities c. Increase in capital gains tax d. Decrease in marginal tax rate on dividends Which of the following concepts tells us that dividends are to be paid only when the capital budget has been already supplied? a. Gordon Growth model b. Dividend irrelevance theory c. Retain Earnings break-point principle d. Residual Dividend Model
Question "Individuals living off of their dividends streams do not like reductions in their quarterly payments." This sounds like an argument for what type of dividend policy? A. residual dividend policy B. sticky dividend policy C. constantly declining dividend policy D. none of the above
4. Dividend practices In general, firms dividend practices fit into the categories listed in the following table (constant payout ratio, low regular dividend plus extras, residual dividend policy, and stable, predictable dividend policies). Identify the category that each practice corresponds to in the table. Practice Globo-Chem Co. sets its dividend rather conservatively, but supplemental dividends are periodically issued when it finds itself with excess funds. St. Mildred's Brewing Co.'s dividends represent the portion of earnings left after it has made all profitable investments. Spentworth Industries Inc.'s investors like the firm's dividend policy because the firm pays the same dividend every year no matter how the firm performs. Extensive Enterprises Inc. pays out a set percentage of its income each year in the form of dividends. This causes the firm's dividends to fluctuate from year to year. Constant Payout Ratio Low Regular Dividend Plus Extras Residual Dividend Stable,…
which one is correct please confirm? QUESTION 10 Dividend policy can affect the value of the firm for which of the following reasons? a. Personal taxes b. Flotation costs c. Shareholder transaction costs d. All of these are correct
which one is correct answer please confirm? QUESTION 28 The business risk of a firm refers to the ____. a. influence of government regulations on business earnings b. results from using fixed-cost sources of funds c. variability in the firm's operating earnings over time d. variability in the price of a firm's securities
Suppose that a new government is elected and it changes the law applying to firms to:• Allow dividend payments to be tax deductible• Stop interest expense on debt from being tax deductibleHolding other factors constant, and assuming that firms seek to maintain an optimal capital structure in accordance with trade-off theory, what would you expect to happen to the debt ratio of a firm with both equity and debt in its capital structure?a. An increase in the debt ratiob. A decrease in the debt ratioc. The debt ratio would be unchangedd. The debt ratio would doublee. None of the above or it is not possible to say
15-7 The argument that homemade dividends would lead to the irrelevance of dividend policy hinges critically on the assumption Select one: a. of no taxes and transaction or flotation costs. b. that shareholders are willing to buy more shares. c. that the capital asset pricing model can be used to value shares. d. that the company will issue more shares. e. of stable dividend payment.
which one is correct answer? Q30: ____ determines the ultimate distribution of the firm’s earnings between reinvestment and cash dividend payment to shareholders. a. Financial expertise b. Board of Directors’ agreements c. Dividend policy d. Management efficiency
1.Research why firms would change their dividend policy citing two firms within recent times which have announced a change in their policy. How was the decision announced, and whatdid the market think about the change in their policy. 2. In practice the dividend policy decision is made jointly with capital structure and capital budgeting decisions. Explain why this is the best practice, and the factors that influence the dividend policy decision process.
which one is correct please confirm? QUESTION 26 One reason why small business concerns have very low dividend payout ratios is that the firm ____. a. needs funds for taxes b. needs the funds to finance growth c. is usually low on cash d. prefers stock offerings