Conduct a stock repurchase or distribute dividends

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Reference no: EM13946817

Sunny Corp is an oil drilling company and has some free cash flow that is not expected to be used for growth or investment projects. The company plans to distribute to its sharholders but is still deciding whether they should conduct a stock repurchase or distribute dividends. Which of the following is a characteristic of a firm’s option distribution policy? A. It maximizes the firm’s return on equity. b. It maximizes the firm’s total assets. C. It maximizes the firm’s intrinsic value D. It maximizes the firm’s earning per share Which of these statements is true? a. Taxed on dividends are paid in the year they are received b. Taxed on dividends are paid when the stock is sold Consequently the tax code encourages many individual investors to prefer? A. Dividends B. Capitals gains some researchers and analysts have noticed a trend in which firms that increase their dividends see an increase in their stock price. The theory of ___ explains this phenomenon. A. Clientele effect B. Information content In some cases, analysts notice that groups of similar investors tend to flock to stocks that have dividends policies consistent with their needs. This circumstance is an illustration of: A. The information content effect. B. The client effect

Reference no: EM13946817

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