1) Compare and contrast a sticky dividend policy with a residual dividend policy. Which policy is more widely used by large corporations? What advantages does that policy have over the other?

2) The dividend payout ratio equals dividends paid divided by earnings. How would you expect this ratio to behave during a recession? What about during an economic boom?

3) Tang Mine has 100,000 shares outstanding and just declared a 2-for-1 stock split. Before the announcement, the firm's shares were trading at RM50.00 per share. After the stock split, the firm's shares should trade at _____ per share.

4) The current stockholders equity account for Milo Farms is as follows:

Common stock (50,000 shares at $3 par)	$150,000
Paid-in capital in excess of par	$250,000
Retained earnings	$450,000
Total stockholders equity	$850,000

Milo has announced plans to issue an additional 5,000 shares of common stock as part of its stock dividend plan. The current market price of Milos common stock is $20 per share. Show how the proposed stock dividend would affect the stockholders equity account.