Assume that a company announces an unexpectedly large cash dividend to its shareholders. In an efficient market without information leakage, one might expect:a. An abnormal price change at the announcement.b. An abnormal price increase before the announcement.c. An abnormal price decrease after the announcement.d. No abnormal price change before or after the announcement.

Q: All of the following are risks associated with buying stocks, except -- loss of interest payments if…

A: Stocks are based on market demand and supply and it is very volatile and risky.

Q: Which of the following sources of market inefficiency would be most easily exploited?a. A stock…

A: Market inefficiency refers to the deficiency of the market to absorb information and represent it in…

Q: is(are)the reason(s) for profit maximization not a reasonable goal for firms. a. Profit concept…

A: Profit Maximisation Concept aims at carrying out the business activities in such a way that the…

Q: Assumes stock markets are both deep (many buyers and sellers) and liquid (easy to buy or sell). As…

A: Stock market is the marketplace where stocks are bought and sold by traders. The volatility of the…

Q: An investment bank’s clients wanted to manipulate its stock price in order to facilitate a better…

A: Here Investors bank provides helps to their client to manipulate its stock price to increase the…

Q: When a company issues (i.e., sells) common shares to investors in exchange for cash, the effect of…

A: When shares are issued in cash then cash is increased by the no. of shares issued multiply be the…

Q: In a strong-form efficient market, accounting announcements: will impact stock price only if it…

A: Stock price can be defined as the monetary value of a stock at which the stock is traded in the…

Q: Companies often are under pressure to meet or beat Wall Street earnings projections in order to…

A: State how company manage earnings by changing depreciation method as shown below: Companies can…

Q: If a company’s market price rises above the IPO price, does that suggest that the company left money…

A: An initial public offering refers to the new or fresh issue of stock to a group of investors.…

Q: The most important factor to consider when determining the dividends to be declared is *…

A: Dividend is a part of Net profit earned by the entity & distributed among the equity…

Q: If a company is thinking about distributing excesscash through a stock repurchase program in lieuof…

A: The company chooses to repurchase its shares in the following situation. To reduce outstanding share…

Q: If a firm strictly adheres to the residual dividend policy, a sale of new common stock by the…

A: Under residual dividend policy, dividends are paid on leftover profits after the after the company…

Q: The cost of retained earnings is less than the cost of new outside equity capital.Consequently, it…

A: Introduction: Generally, retained earnings are the total earnings of a company since the company was…

Q: If a company lowers its cash dividend payment, does that always send a bad signal? If not, provide…

A: Every company receives their capital in the form of equity or debt. Equity is from the shareholders…

Q: Give two reasons stockholders might be indifferent between owning the stock of a firmwith volatile…

A: Stock refers to the financial securities which are issued by the organization to raise funds.…

Q: Neptune Corporation is following the residual dividend policy with regard to the payment of cash…

A: Dividends are distribution of surplus profits by a firm to its shareholders as a return for…

Q: Which of the following is not one of the primary considerations management must make before a cash…

A: Answer: Primary considerations are those which directly impact any decisions made for the company.…

Q: Describe the two possible market signals that investors perceive from a firm announcing an increase…

A: Dividend refers to that portion of the profits of the company which is distributed among the…

Q: Why might stockholders be indifferent to whetheror not a firm reduces the volatility of its cash…

A: Stockholders will be indifferent if the firm does not reduce the volatility of cash flows because…

Q: On the average, the announcement of a decrease in dividends can be interpreted by investors as bad…

A: A financial manager has to take three types of decisions for the company. They are investing…

Q: Companies often are under pressure to meet or beat Wall Street earnings projections in order to…

A: 1.

Q: Which of the following statements is NOT true?   A. Stock owners benefit from stock price…

A: Stock or Share refers to smallest part in which total capital of entity is divided. Stock has face…

Q: Companies are more apt to choose repurchases over dividends if doing so will enable them to I. take…

A: When a company decides to buy back its own stock from the market, this is known as a share…

Q: Which of the following statements is most likely FALSE? A. We should use the general dividend…

A: The dividend discount model values a company by discounting the future dividends. The present value…

Q: Give two reasons why stockholders might be indifferent between owning the stock of a firm with…

A: Stock is a type of security in a company that denotes ownership. Every company can raise the capital…

Q: State whether the following statement is true or false and provide a written explanation of your…

A: Dividend growth model A method that helps the investors to calculate the current price of the stock…

Q: Which is NOT a potential explanation for IPO short-term underpricing? Underwriters can unload more…

A: Underpricing is the practice of listing an initial public offering (IPO) at a price below its real…

Q: What are the company motives for declaring dividends or stock repurchase programs? 2. How would you…

A: Because you have asked multiple questions, we will solve the first question as per the policy of…

Q: Indicate whether its TRUE or FALSE. Then provide a complete explanation! Financial risk is…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: Question Which of the following is NOT a reason for a high-dividend-payout policy? A.…

A: High Dividend Policy: It refers to a company where the company declares more of the proportion as…

Q: A company might purchase treasury stock for all of the following reasons excepta. it wants to…

A:

Q: Which one of the following methods is not derived from the principle that the value of a stock is…

A: The valuation methods can be divided into discounted cash flows method and the comparables method.

Q: ent date AN

A: Announcement Date is the date which is declared by the company for payment of dividend. This is also…

Q: Which statement best describes a possible result of treasury shares transactions? * May increase but…

A: Hi student Since there are multiple questions, we will answer only first question.

Q: tock repurchases occur when a company buys its outstanding stock which is often referred to as…

A: 1. The answer is Open-market operation. Under the open-market operation, the company will announce…

Q: Which of the following is NOT a reason for a high-dividend-payout policy? A.        convenient and…

A: High Dividend Policy: It refers to a company where the company declares more of the proportion as…

Q: Which of the following statement is false? A -Both stock splits and stock dividends increase the…

A: Stock split is division of shares on par value , thereby decreasing price of shares in market, and…

Q: The price-earnings ratio of a company tells how the company determines the price of common stock…

A: "Since you have posted multiple questions, we have solved the first question for you. To get it…

Q: Companies are far more reluctant to cut dividend than to increase them. Why might this be the case?…

A: Dividends are payouts of a company’s profits to its shareholders as a return on capital invested by…

Q: Which one of the following statements is correct? A Modigliani and Miller argued that dividend…

A: Repurchase of shares are alternative procedure to issue dividend by distribution of wealth in the…

Q: Explain why the following statement is wrong (1 paragraph maximum): "The main reason why some…

A: Share repurchase is defined as transaction where the businesses purchases its own shares from the…