Chapter14DividendsandDividendPolicyMultipleChoiceQuestions1.Whichoneofthefollowingisapaymentofeithercashorsharesofstockthatispaidoutofearningstoafirm'sshareholders?InterestDistributionRetainedearningsDividendStockrepurchaseWhichoneofthefollowingisapaymentbyafirmtoitsshareholdersfromanysourceotherthancurrentoraccumulatedretainedearnings?InterestDistributionRetainedearningsDividendStockrepurchaseWhichoneofthefollowingbestdefinesaregularcashdividend?DistributionbyafirmtoitsshareholdersPaymentfromanysourcebyafirmtoitsownersOne-timepaymentofcashbyafirmtoitsshareholdersCashpaymentbyafirmtoitsownersaspartofafirm'snormaloperationsDistributionoftheproceedsfromthesaleofaportionofafirm'soperationsWhichoneofthefollowingisthedateonwhichtheboardofdirectorsagreestopayadividendandpassesaresolutiontodoso?DateofrecordEx-dividenddatePaymentdateDeclarationdatePublicannouncementdateTheex-dividenddateisdefinedas day(s)beforethedateofrecord.threebusinessthreetwobusinesstwooneOnwhichoneofthefollowingdatesisthedeterminationmadeastowhichshareholderswillreceiveadividendpayment?DateofrecordEx-dividenddatePaymentdateDeclarationdatePublicannouncementdateOnwhichoneofthefollowingdatesaredividendchecksmailed?DateofrecordEx-dividenddatePaymentdateDeclarationdatePublicannouncementdateTheclienteleeffectstatesthatinvestorsfallintovariousgroupsbecauseofdifferencesintheirpreferencesforwhichoneofthefollowing?SharepricelevelsRisklevelShort-termversuslong-terminvestmentsRatesofreturnDividendsThismorning,LambertMaterialsbought10,000ofitsoutstandingsharesintheopenmarket.Whattypeoftransactionwasthis?StockpayoutStockdistributionStockdividendStockrepurchaseStockreversalWhichoneofthefollowingisanon-cashpaymentmadebyafirmtoitsshareholdersandisapaymentthatlessensthevalueofeachoutstandingshare?ReversestocksplitCashdistributionStockdividendRegulardividendLiquidatingdividendWhichoneofthefollowingincreasesthenumberofsharesoutstandingbutdoesnotincreasethevalueofowner'sequity?StockrepurchaseReversestocksplitStocksplitCashdistributionLiquidatingdividendDuringthepastyear,ABCstockhassoldforaslittleas$19ashareandamuchas$33ashare.Whichoneofthefollowingtermsappliestotheseprices?BenchmarkvaluesPricesplitsPricedividersSplitrangeTradingrangeWhichoneofthefollowingreducesthenumberofsharesoutstandingbutdoesnotchangeafirm'stotalequity?StocksplitDistributionReversesplitLiquidationRedemptionLester'sDryGoodspaid$1.10pershareindividendslastyear.Thecompanycurrentlyhasexcesscashandwouldliketodistribute$0.40asharetoitsshareholders.However,thecompanyisconcernedaboutincreasingthedividendbythatamountasitwillnotbeabletoaffordanyincreaseinthefutureanddoesn'twanttolowerthedividendonceithasbeenraised.Whichoneofthefollowingisprobablythebestsuggestionfordistributingthe$0.40pershare?A.Specialdividendof$0.40pershareExtracashdividendof$0.40pershareLiquidatingdividendof$0.40pershareIncreasetheregulardividendby$0.11andpayaspecialdividendof$0.29Increasetheregulardividendby$0.11andpayanextracashdividendof$0.29DowntownMerchantshaspaidaquarterlydividendof$0.60pershareforthepasttwoyears.Thisquarter,thefirmplanstopay$0.60plusanadditional$0.05.Thefirmhasstatedthatituncertainwhetheritwillpay$0.60or$0.65persharenextquarter.Whichoneofthefollowingisthebestdescriptionoftheadditional$0.05thatisbeingpaidthisquarter?LiquidatingdividendSpecialdividendExtradividendStockdividendNormaldividendWhichoneofthefollowingisanexampleofaliquidatingdividend?ValleyFeedMillsrecentlysolditsgrainstoragefacilityandisdistributingtheproceedsofthatsaletoitsshareholders.Kate'sWineryhasexcesscashthatitwishestodistributetoitsshareholdersinadditiontoitsnormalcashdividend.Thisextradistributionusuallyoccursaboutonceeveryyear.Kurt'sMusicisplanningtoincreaseitsquarterlydividendbythreepercent.TheDriedFloristispreparingtopayitsfirstannualdividendof$0.08pershare.HiTekhadanextraordinarilyprofitableyearandhasdecidedtodoaone-timeonly$10persharecashdividend.Whichoneofthefollowingeventsmustoccurbeforeafirmcanofferaliquidatingdividend?BankruptcyfilingInsolvencydeclarationAssetsaleNegativeequityFailedbondissueKelseyInternationaldeclaredadividendonFriday,November13,thatispayableonFriday,December4,toholdersofrecordonMonday,November30.Whatisthelatestdatethatyoucanpurchasethisstockifyouwishtoreceivethisdividend?Assumetherearenobankingholidayswithinthisperiodoftime.Tuesday,November24Wednesday,November25Thursday,November26Friday,November27Monday,November30Whichoneofthefollowingdatesisthedateonwhichtheboardofdirectorsvotestopayadividend?RecorddateDeclarationdateEx-dividenddatePaymentdateSettlementdateTuesday,December1,istheex-dividenddateforAlphastock.Whichoneofthefollowingdatesistherecorddate?Assumetherearenobankingholidaystoconsider.Friday,November27Monday,November30Wednesday,December2Thursday,December3Friday,December4ChelsieEnterprisesdeclaredadividendtoshareholdersofrecordonMonday,February8,thatispayableonFriday,February26.Carlaknowsthatherdividendchecknormallyarrivesthreebusinessdaysafterthecheckiswritten.Onwhichoneofthefollowingdaysshouldsheexpecttoreceiveherdividendcheck?Wednesday,February10Thursday,February11Monday,March1Tuesday,March2Wednesday,March3DavidsonInteriorsdeclaredadividendtoholdersofrecordonThursday,October15,thatispayableonMonday,November2.Suenettepurchased200sharesofDavidsonInteriorsstockonMonday,October12andJakepurchased100sharesofthisstockonthefollowingday.Whichoneofthefollowingstatementsiscorrectgiventhisinformation?BothSuenetteandJakewillreceivethisdividend.SuenettewillreceivethedividendbutJakewillnot.JakewillreceivethedividendbutSuenettewillnot.NeitherSuenettenorJakewillreceivethisdividend.Youcannotdeterminewhowillorwillnotreceivethisdividendbasedontheinformationprovided.Twelvedaysago,DOG,Inc.declaredadividendof$1.34ashare.Theex-dividenddateistomorrow.Allelseconstant,whichoneofthefollowingisthebestestimateofDOG,Inc.'sopeningstockpricetomorrow?$1.34lowerthantoday'sclosingpricetoday'sclosingpriceminusanamountapproximatelyequaltotheaftertaxvalueofthedividendthesameastoday'sclosingpricesincethedividendisexpected$1.34higherthantoday'sclosingpricetoday'sclosingpriceplusanamountapproximatelyequaltotheaftertaxvalueofthedividendWhichoneofthefollowingstatementsiscorrect?Dividendsareirrelevant.Flotationcostsareagoodreasontosupportahighdividendpayout.Currenttaxlawsfavorhighcurrentdividendsforindividualinvestors.Dividendpolicyisthetimepatternofdividendpayout.Corporateinvestorstendtopreferlowdividendpayoutsonsecuritiestheyown.Whichoneofthefollowingisanargumentthatdividendpolicyisirrelevant?Flotationcostsastheyapplytoequities.Taxlawsastheycurrentlyexist.Anunsatisfieddemandforhigh-dividendpayingstocks.Currentequilibriumintheclienteledividendmarket.Thecurrenttaxexclusionavailabletocorporateinvestors.Whichoneofthefollowingstatementsiscorrectconcerningthetaxationofdividendsandcapitalgains?Seventypercentofcapitalgainsderivedfromstockinvestmentsaretaxexemptforcorporateinvestors.Dividendsareaformoftax-exemptincomeforindividualinvestors.Allinvestorsaresubjecttothesametaxrateondividendincome.Individualinvestorscandefertaxationonbothdividendsandcapitalgains.Asof2003,individualinvestorspaya15percenttaxonbothdividendsandcapitalgains.Whichoneofthefollowingwouldtendtofavoralowdividendpayout?HighertaxratesoncapitalgainsthanondividendincomeHighflotationcostforequityissuesEndowmentfundinvestorswhocannotspendprincipalInvestors'desireforahighdividendyieldEliminationofthetax-deferraloncapitalgainsWhichtwoofthefollowingtendtolimittheamountofdividendsthatcanbepaidbyaleveragedcorporation?currenttaxlawscorporatetaxexclusionbondindenturecovenantstatelawspertainingtoretainedearningsIandIIonlyIandIIIonlyIIandIIIonlyIIandIVonlyIIIandIVonlyAsof2003,themaximumtaxrateonlong-termcapitalgainsforhigh-incomeindividualswaswhichoneofthefollowingrates?10percent15percent20percent35percent39percentWhichoneofthefollowingfactorsfavorsahighdividendpayout?LowtransactioncostsonstocktradesLowertaxesoncapitalgainsthanondividendsTaxdefermentoncapitalgains,butnotondividendincomeFlotationcostsCorporateshareholdersWhatpercentofcapitalgainsareexcludedfromtaxationforcorporateshareholders?0percent10percent25percent70percent75percentPhilisreviewingABCCompany'sdividendpolicyasitrelatestothefirm'sshareholders.Aspartofthisreview,hewantstodivideshareholdersintotwobasiccategoriesinrespecttodividendpayments.Thefirstgroupwillbeshareholderswhoaretaxedondividendincomeandthesecondgroupwillbeshareholderswhoreceivesomeformoftaxbreakondividendincome.Whichofthefollowingtypesofshareholdersshouldbeplacedinthetax-favoredsecondgroup?I.corporatepensionfundindividualstrustfundsIonlyIIIonlyIandIIIonlyIIandIVonlyI,II,andIVonlyAssumethatclientelesexist.Giventhisassumption,whichoneofthefollowingstatementsiscorrect?Afirmcanincreaseitssharepricebyincreasingitsdividendpayout.Dividendpolicyisirrelevantaslongaseachclientelegroupiscurrentlysatisfied.Allfirmswilladoptahighdividendpayoutpolicy.Alldividendsbecomeirrelevant.Allfirmsshouldadoptalowdividendpayoutpolicy.Martin&Martin,Inc.stockiscurrentlysellingfor$19pershare.Thefirmjustmadeanoffertooneofitsmajorshareholderstorepurchaseallthesharesownedbythatshareholderfor$25pershare.Whattypeofofferisbeingmade?RightsofferSecondaryissueTargetedrepurchaseTenderofferPrivateissueJosephTurnerandSonshas125,000sharesofstockoutstanding.Thefirmhasextracashsoitannouncedthismorningthatitiswillingtorepurchase25,000ofitsshares.Whattypeofofferisthefirmmaking?RightsofferSecondaryissueTargetedrepurchaseTenderofferPrivateissueWhichofthefollowingaremeansbywhichafirmcanreduceitsnumberofoutstandingshares?openmarketpurchaserightsoffertenderoffertargetedrepurchaseIVonlyIandIVonlyII,III,andIVonlyI,IIIandIVonlyI,II,III,andIVKelso'sisconsideringspending$80,000oneitherastockrepurchaseoranextracashdividend.Whichoneofthefollowingvalueswillbethesamewhetherthefirmpaysadividendorrepurchasesstock?Assumetherearenotaxesormarketimperfections.NumberofsharesoutstandingPricepershareEarningspersharePrice-earningsratioMarketvalueofequitypershareWhichoneofthefollowingwillresultfromastockrepurchase?IncreaseinthenumberofsharesoutstandingDecreaseintheearningspershareDecreaseinthemarketpricepershareIncreaseinthemarketvalueofequitypershareDecreaseintheP/EratioElkinsFeedLotisanall-equityfirmwithpositivenetincome.Whichoneofthefollowingwillresultifthefirmpaysacashdividend?NumberofsharesoutstandingwillincreaseEarningspersharewilldecreaseTotalassetswillremainconstantPrice-earningsratiowilldecreaseTotalequitywillincreaseAssumetherearenotaxesorimperfections.Giventhisassumption,whichoneofthefollowingstatementsiscorrect?Acashdividendhasnoeffectonthemarketpriceofthepayer'sstock.Acashdividenddecreasesshareholderwealth.Stockrepurchasesdecreasethemarketvaluepershare.Bothacashdividendandasharerepurchaseincreaseafirm'sPEratio.Astockrepurchasehasthesameeffectonafirm'smarketvaluebalancesheetasdoesacashdividend.Giventhecurrenttaxlaws,whichoneofthefollowingstatementsiscorrect?Bothstockrepurchasesandcashdividendsaretreatedequallyfortaxpurposesforindividualshareholders.Stockrepurchasesgiveindividualshareholdersmorecontrolovertheirpersonaltaxesthandocashdividends.Cashdividendsarepreferabletostockrepurchasesfromtheindividualshareholderpointofview.Stockrepurchasesoffermoretaxbenefitstotheissuerthandocashdividends.Cashdividendsoffermoretaxbenefitsthandostockrepurchasesfortheissuer.Whichoneofthefollowingstatementsrelatedtostockbuybacksiscorrect?Stockbuybacksareameansofobtainingsharesforemployeestockoptiongrants.Stockbuybacksarebecomingrareandmaysoondisappeartotally.In2007and2008,U.S.companiesissuedmoresharesthantheyrepurchased.Firmsareonlypermittedonelargesharerepurchaseprogram.Sharerepurchasesarelimitedto10percentofthefirm'soutstandingshares.Ascomparedtoacashdividend,asharerepurchasewilldowhichofthefollowing?IncreasebothearningspershareandthePEratioIncreasetheearningspersharebutnotaffectthePEratioIncreasetheearningspershareanddecreasethePEratioNotaffecteithertheearningspersharenorthePEratioNotaffecttheearningspersharebutwilldecreasethePEratioWhichoneofthefollowingstatementsiscorrect?Generallyspeaking,thesizeofafirmhasnoeffectonitstendencytopaydividends.Themarketcrashandtheaccountingscandalsintheearly2000'stendedtocausefinancially-stablefirmstoceasepayingcashdividends.ThemajorityoffirmseitherstartedpayingorincreasedtheirdividendspershareinresponsetotheMay2003changeindividendtaxation.Firmstendtoprefercashdividendsoversharerepurchasesfortheirflexibilityandtaxbenefits.Anon-dividendpayingfirmismoreapttodoastockrepurchasethantocommencepayingdividends.WhichofthefollowingarefactorsthathelpexplainwhythepercentageofU.S.industrialfirmspayingdividendshasincreasedsincetheearly2000s?decreaseinthenumberofnon-dividendpayingfirmsmaturingofyoung,successfulfirmssignalingofafirm'sfinancialhealthMay2003taxactIandIIIonlyIIandIVonlyI,II,andIIIonlyII,III,andIVonlyI,II,III,andIVWhichoneofthefollowingstatementsiscorrectconcerningdividendsintheU.S.?ThetotalamountofdividendspaidbytheS&P500companieshasincreasedsteadilyeveryyearsince1985.Onlyfinancialsectorfirmsdecreaseddividendsin2008.Dividendamountstendtoreactquicklytochangesintheeconomy.Firmstendtoquicklyadjusttheirdividendstochangesinthefirm'searningspershare.Therearelessthan75companiesintheU.S.thathaveconsistentlyincreasedtheirdividendsforatleastthepast25years.Researchconductedonfirms'dividendpoliciesovertimesupportwhichoneofthefollowingconclusions?Aggregatedividendsandstockrepurchaseshavesteadilydeclinedinrealterms.Dividendsarecurrentlypaidbythevastmajorityoffirms.Managerstendtosmoothdividends.Stockpricestendtoincreasewheneveranticipatedchangesindividendsoccur.Firmscommencepayingdividendspriortodoinganystockrepurchases.Cashdividendssendwhichtwoofthefollowingsignalstothemarket?agencycostswillbeloweredsincelesscashwillbeheldbythefirmthefirmisplanningondownsizingthefirmiscurrently,andexpectstocontinuetobe,profitablethefirmwillnolongerconductstockrepurchasesIandIIonlyIIandIIIonlyIIIandIVonlyIIandIVonlyIandIIIonlyWhichoneofthesestatementsiscorrect?Sincetheearly1980's,ithasbecomeincreasinglymoredifficulttodoastockrepurchaseduetoSECregulations.Itisrelativelyeasytodeterminewhetherornotafirmhascompletedaplannedstockrepurchase.Fixedstockrepurchasesallowmanagerstorepurchasesharesonlywhentheyfeelthosesharesareundervalued.Afixedstockrepurchaseplancouldbeanegativenetpresentvalueinvestmentforthestockissuer.Stockrepurchasessendtheexactsamesignalstoinvestorsasdocashdividends.Whichoneofthefollowingisadrawbackofcashdividends?Firmsmayhavetoforegopositivenetpresentvalueprojects.Stockpricestendtoincreaseasannualdividendamountsincrease.Cashdividendssupportstockprices.Dividendsarefelttobedirectlyrelatedtoagencycosts.Dividend-payingfirmstendtoattractawiderfieldofinvestorsthandonon-dividend-payingfirms.Whichoneofthefollowingtendstobetheprimaryattitudeoffirms'towardstheirdividendpolicy?Dividendsshouldbeincreasedannuallynomatterwhat.Dividendsshouldbeflexibleandadjustedannuallyinresponsetochangesinthefirm'searnings.Thecostsassociatedwithcuttingdividendsareperceivedtobelessthanthecostsofobtainingexternalfinancing.Onceadividendisincreased,itshouldnotbedecreased.Dividendsmoothingistalkedaboutbutisnotreallyafactorthataffectsdividenddecisions.LexingtonStablesjustdeclareda15percentstockdividend.Whichoneofthefollowingincreasedby15percentasaresultofthisdividend?Bookvalueoffirm'sequityShareholders'wealthNumberofsharesoutstandingFirm'scashbalanceStockpriceWhichoneofthefollowingisbasicallyequivalenttoa2-for-1stocksplit?20percentstockdividend25percentstockdividend50percentstockdividend100percentstockdividend200percentstockdividendMercuryHomesjustdeclareda4-for3stocksplit.Whichofthefollowingoccurredasaresultofthissplit?numberofsharesoutstandingincreasedby1/3numberofsharesoutstandingdecreasedby1/4pricepershareincreasedby1/3pricepersharedecreasedby1/4IonlyIandIIIonlyIandIVonlyIIandIIIonlyIIandIVonlyOfthefollowing,whichtwoarethebestreasonsfordoingareversestocksplit?returnastocktoitsnormaltradingrangeeliminatesmallshareholdersreduceshareholdercostsavoiddelistingIandIIIandIIIIIandIIIIIandIVIIIandIVThecommonstockofGallaghan'sclosedat$36.80asharetoday.Tomorrowmorning,thestockgoesex-dividend.Thedividendthatisbeingpaidthisquarteris$1.40ashare.Thetaxrateondividendsis15percent.Allelseequal,whatshouldtheopeningstockpricebetomorrowmorning?A.$35.19B.$35.40C.$35.52D.$35.61E.$35.70WestoverElectricispreparingtopayitsquarterlydividendof$2.20asharethisquarter.Thestockclosedat$57.70asharetoday.Whatwilltheex-dividendstockpricebeiftherelevanttaxrateis10percentandallelseisheldconstant?A.$55.28B.$55.50C.$55.72D.$55.94E.$55.99ThecommonstockofPateeInternationalgoesex-dividendtomorrow.Thestockclosedatapriceof$33.60asharetoday.Thisquarter,thecompanyispayingacashdividendof$0.24ashareandaliquidatingdividendof$0.60ashare.Ignoringtaxesandassumingthatallelseisheldconstant,whatwilltheex-dividendpricebetomorrowmorning?$32.76$33.00$33.36$33.96$34.2359.HarrisBrothersjustannounceditwillbepayinganannualdividendof$0.85ashareplusanextradividendof$0.30asharethisyear.Thecompanyalsoannouncedthatitsregulardividend,whichisallitanticipatespayingafterthisyear,willincreaseby3.5percentannually.Whatistheanticipateddividendpersharenextyear?$0.82$0.85$0.88$1.15$1.1960.KeyserTruckingjustpaiditsannualregularcashdividendof$1.22ashare,alongwithaspecialdividendof$0.25ashare.Thecompanyfollowsapolicyofincreasingitsdividendby2percentannually.Whichoneofthefollowingisthebestestimateofthefirm'snextannualdividendpayment?$1.22$1.24$1.49$1.50$1.5461.GlobalTradershascommonstockoutstandingatamarketpriceof$53pershare.Thetotalmarketvalueofthefirmis$6,603,800.Thefirmplansonliquidatingoneofitsdivisionsfor$548,000incashanddistributingtheproceedstotheshareholdersintheformofaliquidatingdividend.Whatwillbetheamountpershareofthatdividend?$4.197$4.398$4.620$4.714$4.78262.SouthernFoodsrecentlyliquidateditsfastfooddivision.Thatunitrepresented20percentofthefirm'soverallmarketvalue.Priortotheliquidation,thefirm'sstockwassellingfor$43ashare,theannualdividendwassteadyat$1.20pershare,andtherewere16,000sharesoutstanding.Thefirmispreparingtodistributetheentireliquidationproceedstoshareholders.Howmuchwilltheliquidatingdividendbepershare?$0.24$0.36$6.10$7.40$8.6063.NealFabricatorsjustliquidateditspoorestperformingdivisionandrealizednetproceedsfromthetransactionof$2.6million.Thefirmhas180,000sharesofstockoutstandingatamarketpriceof$64ashare.Whichoneofthefollowingisthebestestimateofthestock'spost-dividendpricepershareifthefirmdistributestheentireliquidationproceedsintheformofaliquidatingdividend?Ignoretaxesandmarketimperfections.$49.56$51.38$53.40$58.79$64.00HaywoodandMorehaveamarketvaluebalancesheetasshownbelow.Thefirmcurrentlyhas5,000sharesofstockoutstandingatamarketpricepershareof$35.40.Netincomeis$9,500.MarketValueBalanceSheetExcesscash$8,000 Debt $ 0Otherassets203Q00 Equity 21IQ。。Total $21LOOO Total $2「LCWThefirmhasdecidedtospend$8,000andpayanextracashdividend.Whatwillthefirm'sPEratiobeafterthisdividendispaid,allelseheldconstant?Ignoretaxes.14.2016.6718.6321.2224.50Lester'shasamarketvaluebalancesheetasshownbelow.Thefirmcurrentlyhas7,500sharesofstockoutstandingatapricepershareof$40.Netincomeis$9,500.MarketValueBalanceSheetExcesscc$h$20,000 Debt $ 0Otherassets36&000 Equity383.000Total $3呢QQQ Total$388QQQThefirmhasdecidedtorepurchase$20,000worthofitsoutstandingstock.Whatwillthefirm'sPEratiobeafterthisrepurchase,allelseheldconstant?23.3928.7629.4730.1332.16Zacariah'sNurseryhas6,000sharesofstockoutstandingatamarketpriceof$20ashare.Theearningspershareare$1.54.Thefirmhastotalassetsof$315,000andtotalliabilitiesof$186,000.Today,thefirmispayinganannualcashdividendof$0.80ashare.Ignoretaxes.Whatwilltheearningspersharebeafterthedividendispaid?$0.31$0.74$1.54$20.70$21.0267.Aaron'sNurseryhas6,000sharesofstockoutstandingatamarketpriceof$20ashare.Theearningspershareare$1.54.Thefirmhastotalassetsof$315,000andtotalliabilitiesof$186,000.Today,thefirmisrepurchasing$4,800worthofstock.Ignoretaxes.Whatwilltheearningspersharebeafterthestockrepurchase?$1.283$1.232$1.540$1.604$1.84868.Dorchester,Inc.has7,500sharesofstockoutstandingatamarketpriceof$42eachandearningspershareof$1.80.Thefirmhasdecidedtorepurchase$63,000worthofstock.WhatwillthePEratiobeaftertherepurchase,allelseheldconstant?$1.30$1.44$1.80$2.02$2.2569.Gloria'sBoutiquehas4,000sharesofstockoutstandingatapricepershareof$19.Whatwillthepricepersharebeifthefirmpaysa$1.20persharedividend?Ignoretaxesandmarketimperfections.$17.80$18.40$18.80$19.00$20.20Gloria'sBoutiquehas4,000sharesofstockoutstandingatapricepershareof$19.Thefirmhasdecidedtorepurchase500ofthosesharesintheopenmarket.Whatwillthepricepersharebeafterthesharerepurchaseiscompleted?Ignoretaxesandmarketimperfections.$17.80$18.40$18.80$19.00$20.20CookiesandMorehas8,000sharesofstockoutstandingatamarketpriceof$13.60pershare.Whatwillthepricepersharebeafterthefirmdeclaresa10percentstockdividend?Ignoretaxesandmarketimperfections.$12.24$12.36$13.60$14.96$15.00Martha'sBakedGoodshas15,000sharesofstockoutstandingatamarketpriceof$24.10pershare.Whatwillthepricepersharebeafterthefirmdeclaresa5percentstockdividend?Ignoretaxesandmarketimperfections.$22.90$22.95$24.10$25.31$25.40Heidiowns400sharesofBoydEnterprisesstock,whichisvaluedat$17ashare.BoydEnterprisesjustdeclareda10percentstockdividend.HowmanyshareswillHeidiownandwhatwillthepricepersharebeafterthedividend?A.360;$15.45B.360;$18.70C.440;$15.45D.440;$17.00E.440;$18.70PlatoUnitedhas17,000sharesofstockoutstandingatapricepershareof$33.Howmanyshareswillbeoutstandingifthefirmdoesa5-for-4stocksplit?13,600shares15,800shares17,000shares19,600shares21,250sharesMuellerBrothershas38,000sharesofstockoutstandingatapricepershareof$59.Howmanyshareswillbeoutstandingifthefirmdoesa3-for-2stocksplit?24,000shares25,333shares55,667shares57,000shares61,000sharesLester'sMeatMarkethas7,000sharesofstockoutstandingatapricepershareof$11.Whatwillthepricepersharebeifthefirmdeclaresa3-for-5reversestocksplit?A.$6.60B.$7.50C.$11.00D.$15.00E.$18.33Theodore'shascommonstockoutstandingatapriceof$26ashare.Thetotalmarketvalueoftheequityis$429,000.Howmanysharesofstockwillbeoutstandingifthefirmdoesa2-for-5reversestocksplit?A.41,250shares36,000shares6,600shares7,500shares16,500sharesJerricurrentlyowns200sharesofAlphastock.Eachshareiscurrentlyworth$36.WhatwillJerri'sinvestmentinAlphabeworthifthecompanydeclaresa4-for-3stockdividend?A.$5,400B.$7,200C.$9,000D.$21,600E.$28,800Taylor's,Inc.stockhasplummetedinvalueandiscurrentlypricedat$4ashare.Theexchangeonwhichthestocktradesrequiresthattheminimumstockpricebe$10ashare.Taylor'shasdecidedtodoareversestocksplittoavoiddelisting.However,whenitdoesthis,thefirmwantsthestockpriceincreasedtoatleasttwicetheminimumexchangerequiredprice.Whichoneofthefollowingstocksplitratiosismostappropriateforthissituation?1-for-31-for-52-for-93-for-15-for-1StellarTechnologieshas48,000sharesofstockoutstandingatamarketpriceof$6ashare.Whichoneofthefollowingstocksplitsshouldthefirmdeclareifitwantstoincreasethestockpricetoexactly$20ashare?Ignoreanytaxesormarketimperfections.10-for-3stocksplit3-for-1stocksplit1-for-3-reversestocksplit2-for-7reverses