Quiz Ch 16 – T/F Managerial Reluctance in Dividend Changes
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
True or false: Managers exercise caution when contemplating dividend changes that might require reversal.
True or false: Managers exercise caution when contemplating dividend changes that might require reversal.
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?