Objective type questions on issue of dividend

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Reference no: EM1311044

1) Paying a stock dividend ________________ the retained earning account.

A. Decreases

B. has no effect on

C. increases

D. reorganizes

2) At a firm's quarterly dividend meeting held April 9, the director's declared a 50 cent per share cash dividend for the holders of record on Monday, May 1st. The firm stock will sell ex-dividends on

A. April 9,

B. May 5th

C. April 25

D. April 27th

3) Dividend policy is a form of

A. Capital budgeting policy

B. financing policy

C. working capital policy

D. dividend reinvestment polity

4) The ________________ is the rate of return a firm must earn on its investments in projects in order to maintain the market value of its stock.

A. yield to maturity

B. cost of capital

C. internal rate of return

D. gross profit margin

5) In order to enhance the wealth of stock holders and to send positive signals to the market, corporations generally raise funds using the following order

A. retain earnings, equity, debt

B. retain earnings, debt, equity

C. debt, retain earning, equity

D. equity, retain earnings, debt

6) The firm has current after-tax earnings of one million dollars and has declared a cash dividend of $400,000. The firm's dividend pay-out ratio is

A. 2.5%

B. 2.0 %

C. 4.0%

D. 40%

7) The ______________ cost are a function of time, not sales, and typically contractual

A. fixed

B. semi-variable

C. variable

D. operating

Reference no: EM1311044

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