Managerial Finance Essay

Managerial Finance line Review Set Dividends Policy 1) If a pixilated grows a counterbalance dispersal policy, distri justions are determined as a equaliser after funding the jacket crown cypher. Therefore, the better the firms enthronization opportunities, the lower its pay start ratio should be. a. True b. dishonest 2) Even if a stock pick has no information content, and even if the dividend per consider adjusted for the split is not change magnitude, thither can still be a real benefit (i. e. , a high value for shareholders) from such a split, but any such benefit is in all likelihood small. a. True b. False 3)Which of the hobby should not influence a firms dividend policy decision? a. The firms ability to accelerate or crack investment projects. b. A strong discernment by most shareholders for current property income versus large(p) gains. c. Constraints imposed by the firms bond indenture. d. The fact that oft of the firms equipment has been leased quite than bought and owned. e. The fact that Congress is considering changes in the impose law regarding the taxation of dividends versus capital gains. 4) Which of the following would be most likely to behave to a change magnitude in a firms dividend payout ratio? a.Its win become more stable. b. Its access to the capital foodstuffs growths. c. Its RD efforts pay off, and it at present has more high-return investment opportunities. d. Its accounts receivable decrease due to a change in its credit policy. e. Its stock price has increased over the last year by a greater percentage than the increase in the broad stock market averages. 5) If a firm adheres strictly to the residual dividend policyThe stronger management thinks the clientele publication is, the more likely the firm is to adopt a strict version of the residual dividend model. d. Large stock repurchases financed by debt bleed to increase earnings per share, but they excessively increase the firms pecuniary risk. e. A vaulting horse paid out to repurchase stock is taxed at the corresponding rate as a dollar paid out in dividends. Thus, some(prenominal) companies and investors are indifferent between distributing property through dividends and stock repurchase programs. 7) PD Co. has a capital budget of $1,000,000. The company wants to maintain a marking capital structure which is 30% debt and 70% equity.