Quiz Ch 16 – T/F Managers’ Approach to Stock Dividend Reduction
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
True or false: Managers steer clear of lowering dividends for their stocks.
True or false: Managers steer clear of lowering dividends for their stocks.
True or false: Miller and Modigliani’s dividend irrelevance assumes market efficiency.
True or false: The enactment of SEC’s Rule 10b-18 shields companies from potential legal consequences for manipulating share prices through repurchases.
True or false: Opting for stock dividends is an equivalent choice to distributing cash dividends.
True or false: While similar to bumper dividends, stock repurchases do NOT serve as a direct replacement for regular cash dividends.
True or false: When utilizing tender offers for share repurchase, companies commonly propose a stock price that surpasses the current market value.
True or false: Cash dividends and stock dividends are avenues for companies to distribute cash to shareholders.
True or false: Numerous companies implement automatic dividend reinvestment plans (DRIPs).
How does the heavier taxation of dividends compared to capital gains influence investor preferences in terms of stock valuation and dividend yields?
Which investor category is most strongly motivated by tax considerations to prioritize dividends over capital gains?