Quiz Ch 17 – Corporate Preference for Dividends over Capital Gains
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
Why might corporations legitimately favor dividends over capital gains?
Why might corporations legitimately favor dividends over capital gains?
Which date corresponds to the day when dividend checks are physically sent to shareholders?
Under the premise that dividend policy is irrelevant, what should be the worth of the stock issued to raise an additional $5,600 in cash?
On which specific date will an investor receive the declared dividends if they own the stock?
What characterizes a firm as ‘smoothing’ its dividends?
Which signal is most likely to result in a reduction in the share price?
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?
When there’s an uptick in share price following a dividend increase, what condition makes this outcome logical?