Quiz Ch 17 – Interpreting a Reduction in Regular Dividend Payment
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
How do investors typically interpret a decrease in a company’s usual dividend payments?
How do investors typically interpret a decrease in a company’s usual dividend payments?
How might investors interpret stock repurchases as a signal regarding the company’s situation?
How do investors interpret dividend changes in relation to future modifications in which aspect?
Why might investors favor capital gains over dividends, even if both are taxed at the same rate?
Caterina Chekov, who holds 100 shares of Kappa Corp, is not in need of the extra cash resulting from the dividend increase. How can she balance the change in dividend policy?
In what situations may boards of directors encounter legal limitations when announcing dividends?
When there’s an uptick in share price following a dividend increase, what condition makes this outcome logical?
In what situation have managers been described as hesitant to raise dividends?
Which is NOT considered a market imperfection affecting the choice between dividends and repurchases?
What is the likely impact on the stock price when investors are anticipating a dividend cut, and the announced reduction matches their expectations?