A company planning to pay a cash dividend in excess of the regular dividend does not want investors to believe that such an extra dividend will be repeated. What will the firm likely call this extra dividend?

a. a stock dividend

b. a cash-liquidating dividend c.

a special dividend

d. a residual dividend

Which circumstance should NOT influence a firms dividend policy decision?

constraints imposed by the firms bond indenture the firms ability to accelerate or delay investment projects the fact that much of the firms equipment has been leased, rather than bought and owned a strong preference by most shareholders for current cash income versus capital gains You own 100 shares of High Level stock, which currently sells for $120 a share.

The company is contemplating a 2-for-1 stock split. What will your position be after such a split takes place? You will have 50 shares of stock, and the stock will trade at or near $60 a share.

You will have 200 shares of stock, and the stock will trade at or near $60 a share. You will have 200 shares of stock, and the stock will trade at or near $120 a share.

You will have 50 shares of stock, and the stock will trade at or near $120 a share.

Which of the following statements is correct?

The stronger management thinks the clientele effect is, the more likely the firm is to adopt a strict version of the residual dividend model.

Current Canadian tax law encourages companies to pay dividends rather than retain earnings. Large stock repurchases financed by debt tend to increase earnings per share, but they also increase the firms financial risk.

If a company uses the residual dividend model to determine its dividend payments, dividend payouts will tend to increase whenever the companys profitable investment opportunities increase.

All other things equal, a stock split will have which of the following effects on shareholders wealth?

Stock repurchases and shareholder wealth are not related.

Shareholders wealth should be reduced.

Shareholders wealth should be increased

Shareholders wealth should remain constant