WorksheetsDividend Policy
Total questions: 20
Worksheet time: 10mins
What is a dividend?
A loan given by shareholders to the company
A return on shareholders’ investment paid by the company
A tax paid by companies to the government
A fee charged to investors
Which form of dividend is MOST commonly paid by companies?
Stock dividend
Property dividend
Cash dividend
Liquidating dividend
Who has the authority to declare and approve dividends?
Shareholders
Government regulators
Board of Directors
Company auditors
Dividends can ONLY be paid from:
Bank loans
Share capital
Profits
Asset revaluation surplus
Which statement about dividends is CORRECT?
Companies must pay dividends if they make profits
Shareholders can force the company to pay dividends
Dividend payment is compulsory every year
Dividend payment is at the discretion of the board
A cash dividend refers to:
Distribution of company assets
Distribution of money to shareholders
Distribution of bonus shares
Distribution during liquidation
A stock dividend is BEST described as:
Cash paid from retained earnings
Distribution of company property
Issue of additional shares to shareholders
Payment made only during liquidation
One psychological benefit of stock dividends is that they:
Increase company profits
Increase total company value
Create positive investor perception
Reduce total shares outstanding
Which dividend is paid when a company lacks sufficient cash but owns assets?
Cash dividend
Stock dividend
Property dividend
Residual dividend
A liquidating dividend occurs when:
The company earns high profits
The company issues bonus shares
The company is wound up
The company declares a regular dividend
Dividend policy refers to:
How companies raise capital
How profits are taxed
Decisions on dividend payment amount and frequency
Decisions on issuing shares
Which factor is NOT considered when setting dividend policy?
Company liquidity
Growth strategy
Debt level
Weather conditions
A regular dividend policy is MOST suitable for companies with:
Unstable earnings
Consistent cash flows
High business risk
Limited liquidity
Under a regular dividend policy, dividends are paid:
Only when profits are high
Irregularly
Consistently and predictably
Only during liquidation
Which type of dividend policy provides uncertainty to investors?
Regular dividend policy
No dividend policy
Residual dividend policy
Irregular dividend policy
A no dividend policy is MOST common among:
Mature companies
Retiree-focused firms
High-growth companies
Companies in liquidation
Under a residual dividend policy, dividends are paid:
Before investment decisions
Only if leftover earnings exist
At a fixed amount every year
Regardless of investment needs
The FIRST step in the dividend payment process is:
Record date
Payment date
Declaration date
Ex-dividend date
An investor who buys shares ON or AFTER the ex-dividend date will:
Receive the dividend
Receive double dividends
Not receive the dividend
Receive bonus shares
The payment date refers to:
When shareholders are identified
When the dividend is announced
When the share price drops
When the dividend is actually paid
