Week 9 & 10: Payout Policy

The Record Date falls before the Ex-Dividend Date.

• True

• False

The way a firm chooses between alternate uses of free cash flow is referred to as ________

• retention ratio

• payout policy

• call policy

• debt policy

The date on which the board of directors of a company authorizes the dividend is called the ________ date.

• declaration

• record

• ex-dividend

• distribution

The firm will pay the dividend to all shareholders of record on a specific date, set by the board, called the ________ date.

• declaration

• record

• ex-dividend

• distribution

The date two business days prior to the date on which all shareholders of record receive a payment is called the ________ date.

• declaration

• record

• ex-dividend

• distribution

The date on which a firm pays out dividends is called the ________ date.

• declaration

• record

• ex-dividend

• distribution

A one-time payment to shareholders that is much larger than a regular dividend is often referred to as a(n) ________ dividend.

• taxable

• divesting

• special

• ex-day

Dividend payments that are the result of liquidation of assets are known as ________ and are taxed as capital gains.

• return of capital

• rolling dividends

• alternate payments

• private earnings

An alternate way to pay investors is when the firm uses cash to buy shares of its own outstanding stock, also known as ________.

• dividend investment

• retained earnings

• initial public offering

• share repurchases

A firm may announce its intention to buy its own shares in the open market like any other investor, also known as a(n) ________.

• open market repurchase

• tender offer

• targeted repurchase

• greenmail