Theory believes that dividend or capital gains has an impact on the price of the stock Select the correct response
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- Define each of the following terms: a. Optimal distribution policy b. Dividend irrelevance theory; bird-in-the-hand theory; tax effect theory c. Signaling hypothesis; clientele effect d. Residual distribution model; extra dividend e. Declaration date; holder-of-record date; ex-dividend date; payment date f. Dividend reinvestment plan (DRIP) g. Stock split; stock dividend; stock repurchaseDefine each of the following terms: a. Proxy; proxy fight; preemptive right; classified stock; founders shares b. Free cash flow valuation model, value of operations; nonoperating assets c. Constant growth model; horizon date and horizon value d. Multistage valuation model e. Estimated value (P0); market price (P0) f. Required rate of return, rs; expected rate of return, rs; actual, or realized, rate of return, rs g. Capital gains yield; dividend yield; expected total return h. Preferred stock4. Define the following terms. Signaling hypothesis; clientele effect Residual distribution model; extra dividend Declaration date; holder-of-record date; ex-dividend date; payment date Dividend reinvestment plan (DRIP) Stock split; stock dividend; stock repurchase
- Give typing answer with explanation and conclusion Preferred equity is stock with dividend __ over __ stock, normally with a __ dividend rate, and sometimes __ voting rights. Word bank: common without priority with insignificance variable fixed regularA reduction of par or stated value of stock results from a Group of answer choices liquidating dividend stock split stock option preferred dividend3) Understanding if a stock is undervalued or overvalued will influence if the investor will invest in the stock at the current moment of the analysis. T/F
- This chapter discusses the discounted dividend and corporate valuation models for valu-ing common stocks. Three alternative approaches, the P/E multiple, Enterprise Values, and EVA approaches, were presented. Explain each approach and how you might use each one to value a common stock.Define each of the following terms:a. Target payout ratio; optimal dividend policyb. Dividend irrelevance theory; bird-in-the-hand fallacyc. Information content (signaling) hypothesis; clienteles; clientele effectd. Catering theory; residual dividend modele. Low-regular-dividend-plus-extrasf. Declaration date; holder-of-record date; ex-dividend date; payment dateg. Dividend reinvestment plan (DRIP)h. Stock split; stock dividendi. Stock repurchasewhich one is correct please confirm? QUESTION 7 The cost of equity capital for non-dividend paying stocks can be determined by ____. I. using the Capital Asset Pricing Model II. estimating ke for comparable dividend-paying stocks in their industry a. Only statement I is correct. b. Only statement II is correct. c. Both statements I and II are correct. d. Neither statement I nor II is correct.
- Answer the multiple-choice question below: 1. Which of the following is/are incorrect about the characteristics of preferred stock: I.It has a fixed maturity date II.Dividends are tax-deductible III.Dividend payments vary just like common stock IV.Can be easily converted to a number of common stock Select one: a. I and II only b. I only c. I, II, and III only d. All of the aboveT/F. Since BSOPM was originally developed for a non-dividend paying stock, it is useless for valuing dividend paying stocks. Group of answer choices True FalseGive typing answer with explanation and conclusion Compare and discuss the relevant theory for the findings of the market reaction to dividend changes in (e(iii)). In your discussion, include signalling hypothesis, free cash flow hypothesis, and the clientele hypothesis. 3-day stock return: 1.96% 2-day stock return: 1.96% 3-day market index return: -1.64% 2-day market index return: -0.68% 3-day access return: 3.6% 2-day access return: 2.64%
