Dividend and other payouts

__________ occurs when there is an increase in the number of shares outstanding by reducing the par value of stock.

• regular dividend

• extra dividend

• stock dividend

• stock split

The __________ is the proportion of earnings that are paid to common shareholders in the form of a cash dividend.

• growth rate

• dividend payout ratio

• retention rate

• 1 plus the retention rate

All of the following are true of stock splits EXCEPT:

• market price per share is reduced after the split.

• the number of outstanding shares is increased.

• Total owners equity will change.

• proportional ownership is unchanged.

Which one of the following is a non-cash payment made by a firm to its shareholders that dilutes the value of each share of stock outstanding?

• bonus share or stock dividend

• regular dividend

• reverse stock split

• stock split

What is the name given to a transaction wherein a firm buys some of its own outstanding shares of stock?

• Stock Split

• Reverse Stock split

• Share Buyback

• Bonus issue

The dividend-payout ratio is equal to

• the dividend yield plus the capital gains yield.

• dividends per share divided by earnings per share.

• dividends per share divided by par value per share.

• dividends per share divided by current price per share.

If an individual stockholder reinvests dividends under a company's dividend reinvestment plan, the reinvested dividends are

• not taxable to the shareholder.

• taxable to the shareholder.

• taxable to the company

• None of the other given option

The information content of dividends refers to

• nonpayment of dividends by corporations.

• dividend changes as indicators of a firm’s future.

• a stable and continuous dividend.

• a dividend paid as a percent of current earnings.

The purpose of a stock split is to

• affect the firm’s capital structure

• decrease the dividend

• enhance the trading activity of the stock by lowering the market price

• increase the market price of the stock

While shares buyback a firm can utilize all of the following methods EXCEPT

• purchase on the open market at market prices.

• with a tender offer at varying prices

• with a tender offer at a specified price.

• by purchasing a large block from brokers.