A. Raheem bought stock in a tech company that had just announced a dividend. He did not receive the dividend even though the record date had not yet passed when he purchased it.

This is because he purchased the stock on or after the __________ date.

• a.)
• in-dividend
• b.)
• declaration
• c.)
• ex-dividend
• d.)
• payment

B. Why might investors prefer cash dividends over stock dividends?

• a.)
• If they want to avoid paying taxes right away
• b.)
• If they are seeking long-term capital gains
• c.)
• If they want regular payments that can be used to reinvest in the company
• d.)
• If they want the company to reinvest earnings in itself

C. According to the residual dividend model, what would a company do if its net income is less than its financing needs for planned projects?

• a.)
• Set a target payout ratio
• b.)
• Determine if investors prefer cash of stock dividends
• c.)
• Distribute no cash dividends
• d.)
• Distribute the same dividend as in the past, for the sake of consistency

D. Sumayyah wants to expand her successful T-shirt printing business, but she needs extra capital. She finances the expansion by asking her suppliers to extend the period of time before she must pay them for their goods.

What type of financing resource is Sumayyah using?

• a.)
• Trade credit
• b.)
• Factoring
• c.)
• Commercial lending
• d.)
• Peer-to-peer lending