Under the Jobs and Growth Tax Relief Reconciliation Act of 2003, the maximum rate of taxation on dividends received by shareholders was set at ________. A) 18% B) 20% C) 25% D) 15% ANSWER D
Date: September 19th, 2020
According to the bird-in-the-hand argument, current dividend payments reduce investor uncertainty and result in a higher value for a firm’s stock. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Which of the following statements regarding the balance sheet is NOT correct? A) The balance sheet provides a snapshot of the firm’s financial position at a given point in time. B) The balance sheet lists the firm’s assets, liabilities, and equity. C) The balance sheet reports liabilities on the left side. D) The balance sheet […]
Date: September 19th, 2020
As per dividend relevance theory, current dividend payments are believed to reduce investor’s uncertainty, thereby—all else being equal—placing a lower value on a firm’s stock after its payment. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
A dividend reinvestment plan enables stockholders to ________. A) reinvest the dividends in money market instruments which are risk free B) reinvest all dividends in the firm with no accompanying increase in equity C) acquire additional dividends through redemption of stock D) acquire shares at little or no transaction costs ANSWER D
Date: September 19th, 2020
Which is NOT an example of current liabilities? A) Notes payable B) Accounts receivable C) Current portion of long-term debt D) Taxes payable ANSWER B
Date: September 19th, 2020
At the quarterly meeting of Tangshan Mining Corporation, held on September 10th, the directors declared a $1.00 per share dividend for the firm’s 100,000 shares of common stock outstanding. The net effect of declaring and paying this dividend would be to ________. A) decrease total assets by $100,000 and increase stockholders equity by $100,000 B) […]
Date: September 19th, 2020
The bird-in-the-hand argument espousing the importance of dividends or dividend relevance suggests that investors view current dividends as less risky than future dividends or capital gains. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Stock that is repurchased by the issuing company is called: A) paid in capital. B) retained capital. C) treasury stock. D) par value stock. ANSWER C
Date: September 19th, 2020
The residual theory of dividends suggests that the dividend paid by a firm should be viewed as a residual, the amount left over after all acceptable investment opportunities have been undertaken. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
