Dividend and Topic

4099 WordsSep 11, 201317 Pages
Chapter 14 Questions: Topic: DIVIDENDS 1. Payments made out of a firm 's earnings to its owners in the form of cash or stock are called: A) Dividends. B) Distributions. C) Share repurchases. D) Payments-in-kind. E) Stock splits. Answer: A Topic: REGULAR CASH DIVIDENDS 2. A cash payment made by a firm to its owners in the normal course of business is called a: A) Share repurchase. B) Liquidating dividend. C) Regular cash dividend. D) Special dividend. E) Extra cash dividend. Answer: C Topic: SPECIAL DIVIDENDS 3. A cash payment made by a firm to its owners as a result of a one-time event is called a: A) Share repurchase. B) Liquidating dividend. C) Regular cash dividend.…show more content…
A) stock B) normal C) special D) extra E) liquidating Answer: A Topic: STOCK SPLITS 15. An increase in the firm 's number of shares outstanding without any change in owners ' equity is called a _______________. A) special dividend B) stock split C) share repurchase D) tender offer E) liquidating dividend Answer: B Topic: TRADING RANGE 18. The difference between the highest and lowest prices at which a stock has traded is called its: A) Average price. B) Bid-ask spread. C) Trading range. D) Opening price. E) Closing price. Answer: C Topic: REVERSE SPLITS 16. In a reverse stock split, __________________________. A) the number of shares outstanding increases, and owners ' equity decreases B) the firm buys back existing shares of stock on the open market C) the firm sells new shares of stock on the open market D) the number of shares outstanding decreases, but owners ' equity is unchanged E) shareholders make a cash payment to the firm, just the opposite of a cash dividend Answer: D Topic: REGULAR CASH DIVIDEND 17. All else the same, which of the following is a possible consequence of the firm making a regular cash dividend payment? A) The cash account decreases. B) The additional paid-in capital account decreases. C) The common stock (par value) account decreases. D) The stock price declines by the amount of the
Open Document