HSE Corporate Governance Quiz 3 I

Free Cash Flow to Firm is best described as

• The cash a company generates after taking into consideration cash outflows that support its operations and maintain its capital assets

• The cash a company generates after taking into consideration cash outflows that support its operations, maintain its capital assets and pay to debtholders

• The cash a company generates after taking into consideration cash outflows that support its operations, maintain its capital assets, paid to debtholders and distrbuted equity between shareholders

• None of the options

Annual Free Cash Flow's to Equity resulting value reflects

• Possible payments to creditors

• Possible dividend payments to shareholders

• Possible amount to be retained as spare cash in the company

• Possible amount to repurchase the stocks of the company

When the board declares a dividend, company has to pay it. This incurs:

• Liability for shareholders

• Liability for corporation

• Asset for corporation

• Equity for debtholders

What is a stock dividend?

• Authorisation of additional shares to current stockholders

• Issue of additional shares to current stockholders

• Dividend resolution approved by regulators

• Repurchase of stocks of the company from the exchange

What are the components of Total Shareholder's Return?

• Dividend Yield

• Dividend Payout

• Capital Gain

• Stock selling

What is the rationale of the company to repurchase its own shares?

• Increase its market price

• Improve liquidity of its stocks

• Decrease its market price

• Belief it's undervalued

What is the title of reports annualy submitted by public companies to SEC

• 10-K

• 12-A

• 8-Q

• S7

Dividend can be paid only if Retained Earnings are positive

• TRUE

• FALSE

If company like Mondelez pays dividends 0.35$ each quarter it is best described as

• Stable dividend policy

• Constant dividend policy

• Residual dividend policy

• Random dividend policy

If shareholder requires higher return from the company than his perception of the stock's value

• Increases

• Decreases

• Remains the same