Brealey. Myers. Allen
Chapter 16 Payout Policy
Multiple Choice Questions 1. Firms can pay out cash to their shareholders in the following ways: (I) Dividends (II) Share repurchases (III) Interest payments A) I only B) II only C) III only D) I and II only Answer: D Type: Easy Page: 415
2. Dividends are decided by: (I) The managers of a firm (II) The government (III) The board of directors A) I only B) II only C) III only D) I and II only Answer: C Type: Easy Page: 416
3. Which of the following dividends is never in the form of cash? (I) Regular dividend (II) Special dividend (III) Stock dividend (IV) Liquidating dividend A) I only B) II only C) III only D) I, II, and IV only Answer: C Type: Easy Page: 417
168
Test Bank, Chapter 16
4. Firms can repurchase shares in the following ways: (I) Open market repurchase (II) Through a tender offer (III) Through a Dutch auction process (IV) Through direct negotiation with a major shareholder A) I only B) II only C) III only D) I, II, III, and IV Answer: D Type: Medium Page: 417
5. The par value of the outstanding shares is defined as: A) Retained earnings B) Legal capital C) Book value of equity D) None of the above Answer: B Type: Medium Page: 417
6. Which of these dates occurs last in time (when arranged in the chronological order)? A) Payment date B) Ex-dividend date C) Record date D) Dividend declaration date Answer: A Type: Easy Page: 417
7. Which of the following lists events in the chronological order from earliest to latest? A) Record date, declaration date, ex-dividend date B) Declaration date, record date, ex-dividend date C) Declaration date, ex-dividend date, record date D) None of the above Answer: C Type: Medium Page: 417
8. The procedure where the firm states a series of prices at which it is prepared to repurchase stock. Shareholders submit offers indicting how many shares they wish to sell at each price. The firm then calculates the lowest price at which it is able to buy the desired number of shares.
Multiple Choice Questions 1. Firms can pay out cash to their shareholders in the following ways: (I) Dividends (II) Share repurchases (III) Interest payments A) I only B) II only C) III only D) I and II only Answer: D Type: Easy Page: 415
2. Dividends are decided by: (I) The managers of a firm (II) The government (III) The board of directors A) I only B) II only C) III only D) I and II only Answer: C Type: Easy Page: 416
3. Which of the following dividends is never in the form of cash? (I) Regular dividend (II) Special dividend (III) Stock dividend (IV) Liquidating dividend A) I only B) II only C) III only D) I, II, and IV only Answer: C Type: Easy Page: 417
168
Test Bank, Chapter 16
4. Firms can repurchase shares in the following ways: (I) Open market repurchase (II) Through a tender offer (III) Through a Dutch auction process (IV) Through direct negotiation with a major shareholder A) I only B) II only C) III only D) I, II, III, and IV Answer: D Type: Medium Page: 417
5. The par value of the outstanding shares is defined as: A) Retained earnings B) Legal capital C) Book value of equity D) None of the above Answer: B Type: Medium Page: 417
6. Which of these dates occurs last in time (when arranged in the chronological order)? A) Payment date B) Ex-dividend date C) Record date D) Dividend declaration date Answer: A Type: Easy Page: 417
7. Which of the following lists events in the chronological order from earliest to latest? A) Record date, declaration date, ex-dividend date B) Declaration date, record date, ex-dividend date C) Declaration date, ex-dividend date, record date D) None of the above Answer: C Type: Medium Page: 417
8. The procedure where the firm states a series of prices at which it is prepared to repurchase stock. Shareholders submit offers indicting how many shares they wish to sell at each price. The firm then calculates the lowest price at which it is able to buy the desired number of shares.