31.

A bond is currently callable by the corporation at $1,060. The bond matures in 10 years, has a par value of $1,000 and a coupon rate of 12%, and pays interest semi-annually. The current market yield on bonds of the same credit rating is 8%. A rational investor would pay up to how much money to purchase this bond today?

Select one:

A. $1,000.00

B. $1,060.00

C. $1,271.81

D. $1,670.34

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The "clientele effect" is primarily concerned with

Select one:

A. investor behavior and attitudes toward dividends.

B. relationships between stockbrokers and clients.

C. the company's trade credit policies.

D. promoting the highest possible quality for customers.

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The "signaling effect" relates primarily to

Select one:

A. directives given to the firm's managers by the board of directors.

B. the information provided by the firm to market participants.

C. the messages received by the firm from its shareholders.

D. the ratio of expected income investors to growth investors.

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Which of the following is not true about life cycle growth and dividend policy?

Select one:

A. In the maturity stage, a firm usually pays moderate to high dividends.

B. In the development stage, a firm usually pays significant cash dividends.

C. When a firm is expanding, it may pay stock dividends or split its stock.

D. As a firm grows, it may pay stock dividends or some cash dividends.

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Of the following alternatives, a company with a considerable amount of excess cash and few investment alternatives would be most likely to

Select one:

A. declare a stock dividend.

B. split its stock two-for-one.

C. repurchase some of its own shares.

D. choose to issue additional shares of stock.

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Maxwell Electronics earned $13 million last year and maintains a 30% dividend payout ratio. The company has 2 million shares of common stock outstanding and a P/E ratio of 12. What amount of earnings per share did Maxwell Electronics generate?

Select one:

A. $4.40

B. $5.30

C. $6.50

D. $7.80

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Maxwell Electronics earned $13 million last year and maintains a 30% dividend payout ratio. The company has 2 million shares of common stock outstanding and a P/E ratio of 12. What is the dividend yield for Maxwell Electronics?

Select one:

A. 1.50%

B. 2.50%

C. 3.50%

D. 4.50%

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Marine Biotechnologies, Inc. earned $150 million this year, of which $90 million was retained for future investment projects and the remainder paid out as dividends to shareholders. What was the company's dividend payout ratio?

Select one:

A. 20%

B. 40%

C. 60%

D. 67%

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Davidson Corporation is deciding between the two dividend payment plans below:Year

Plan A

Plan B

1

$3.00

$0.50

2

$3.05

$1.75

3

$3.10

$3.25

4

$3.15

$6.80

Stockholders are expected to discount Plan A by 12% and Plan B by 14%. Based upon the present value of the future dividends, which plan will the stockholders prefer?

Select one:

A. Plan A

B. Plan B

C. Either, since both plans pay equal total dollar amounts.

D. Neither, since the dividend payout ratios are the same.

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Stockholders may prefer dividends instead of reinvested earnings by the firm because

Select one:

A. dividends may resolve some uncertainty.

B. dividend payments have information content.

C. investors may prefer current cash to future cash.

D. all of the above.

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Maxwell Electronics earned $13 million last year and maintains a 30% dividend payout ratio. The company has 2 million shares of common stock outstanding and a P/E ratio of 12. What is the price per share of Maxwell Corporation's stock?

Select one:

A. $72.00

B. $75.00

C. $78.00

D. $81.00

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A stock dividend will

Select one:

A. increase the total value of stockholders' equity.

B. result in an inevitable increase in the stock's market value.

C. decrease the amount of cash available to the corporation.

D. not by itself increase shareholder value.

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The ex-dividend date is the date

Select one:

A. after which no one can purchase more shares of stock.

B. on which the dividend check is mailed to the holders-of-record.

C. the corporation's board of directors actually declares the dividend.

D. after which stockholders are not entitled to the next dividend payment.