CH 13, Dividends and payout policy For 13-1 and 13-2 I'm looking for your thoughts on what might drive the market reactions listed. The answers are basically in the text and lecture notes. Gve it a shot considering what you have learned so far 13-1 Dew Drop In, Inc. announces is quarterly dividend will increase from $3.80 to $4.00. After the announcement, the price of Dew Drop In, Inc.'s stock drops. The most likely explanation is that Which of the following would be a likely justification for no dividend payments being pleasing to shareholders? A) insufficient cash available for dividend payments. B) positive NPV investment projects that require the firm to retain cash for investment purposes. C) an investor dientele that prefers current liquidity. D) cash will be used for a stock dividend. 13-3 The Lacrescent Brewing Company has a retained earnings balance of $2,000,000. The company reported net income of $600,000, sales of $4,000,000, and has 200,000 shares of common stock outstanding. The company announced a dividend of $2.00 per share. What is the company's dividend payout ratio? 13-4 LaCrosse Industries currently has 500,000 shares outstanding at a market price of $135 per share. The firm would like to lower the trading range closer to $50 per share. What sort of stock split should the firm announce: How many shares will be issued for each current share and what will the market price be per share? Hint, come up with some even number of new shares for each old share, 550 per share is the ballpark range the firm is looking at, not a firm number