The ex dividend period begins four business days prior to the payment date. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
The payment of cash dividends to corporate stockholders is decided based on the recommendation of the auditors. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
The repurchase of common stock results in a type of reverse dilution, since the earnings per share and the market price of stock are increased by reducing the number of shares outstanding. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The repurchase of shares reduces the number of outstanding shares. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
In a tender offer share repurchase, a firm announces the price it is willing to pay to buy back shares and the quantity of shares it wishes to repurchase. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The Jobs and Growth Tax Relief Reconciliation Act of 2003 significantly changed the tax treatment of corporate dividends for most taxpayers by dropping the tax rate to the rate applicable on capital gains, which is a maximum rate of 15%. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The Jobs and Growth Tax Relief Reconciliation Act of 2009 significantly changed the tax treatment of corporate dividends for most taxpayers by dropping the tax rate to the rate applicable on capital gains, which is a maximum rate of 25%. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
By purchasing shares through a firm’s dividend reinvestment plan (or DRIP), shareholders typically can acquire shares at a value that is above the prevailing market price. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Dividend reinvestment plans (DRIPs) enable stockholders to use dividends received on a firm’s stock to acquire additional shares–even fractional shares–at little or no transaction (brokerage) cost. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Because retained earnings are a form of internal financing, the dividend decision can significantly affect a firm’s external financing requirements. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
