FINA7CR Group 5 Class Engagement

Which of the following is NOT an advantage of DRIPS?

• Reduced underwriting costs

• Low startup and maintenance costs

• Appealing to shareholders

• Availability of new capital for the company

• None of the above

Which of the following factor(s) improves the profitability of a firm paying dividends?

• Fast growing industry

• Smaller firms

• High level of asymmetric (confidential) information

• Low profitability

• All of the above

Companies that have recently seen revenue growth pay high dividends

• True

• False

Which company in South Africa is one of the leading global transfer agents?

• BHP

• EasyEquities

• Computer Share

• First National Bank (FNB)

• Standard Bank

Agency costs develop through...

• Shareholders to the effect of managers

• Employees

• The firm's debt

• Managers to the effect of shareholders

FNB are in the process of revising its dividend policy. Which of the following are determinants they should consider? (You may select more than one option)

• Ownership structure

• DRIPS

• Underwriting costs

• Information Symmetry

• Liquidity

How does financial leverage affect the probability that a firm will pay dividends?

• The larger the leverage ratio, the greater chances of receiving a dividend

• The larger the leverage ratio,the lower the chances of receiving a divdend

• It has little influence

• It has no influence at all

• None of the above