Chapter 6-8 Test Questions

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Finance Quiz 6‏
|Question 1 |1 points |Save | | |Dividends per share divided by earnings per share equal the dividend payout ratio. | | | | | | | | | | | | | | |[pic] |True | | | | | | | | | | | | | | |

|Question 2 |1 points |Save | | |Investor A owns 10% of the common stock of IDE Corporation. After IDE completes a 2-for-1 stock| | | | | | |split, Investor A will own 20% of the common stock of the corporation. | | | | | | | | | | | | | | |[pic] |True | | | | | |

|Question 3 |1 points |Save | | |From the shareholders' perspective, a stock repurchase has a potential tax advantage over the | | | | | | |payment of a cash dividend. | | | | | | | | | | | | | | |[pic] |True | | | | | |

|Question 4 |1 points |Save | | |A fast-growing company with many high net present value projects may maximize shareholder | | | | | | |wealth by NOT paying a dividend. | | | | | | | | | | | | | | |[pic] |True |Check it | | | | |

|Question 5 |1 points |Save | | |There is no difference on an economic basis between a stock dividend and a stock split. | | | | | | |True | | | | | |

|Question 6 |1 points |Save | | |Shareholders may prefer a share repurchase program to dividends because dividends are subject | | | | | | |to taxation and increasing value per share due to repurchase programs is tax deferred. | | | | | | | | | | | | | | |[pic] |True | | | | |...
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