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.

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

Plan A

Plan B

Year 1

Plan A $3.00

Plan B $0.50

Year 2

Plan A$3.05

Plan B$1.75

Year 3

Plan A$3.10

Plan B$3.25

Year 4

Plan A$3.15

Plan B $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.

The primary reason for a corporation to engage in a stock split is to

Select one:

A. indicate its unexpectedly low earnings per share.

B. make a stock dividend payment to shareholders.

C. assist in the takeover of another firm.

D. lower the stock price to a more popular trading range.

Which of the following will affect a company's dividend policy?

Select one:

A. The amount of new investment projects available.

B. The preferences for dividends or capital gains of its shareholders.

C. Legal rules concerning the protection of the firm's capital.

D. All of the above.

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.

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.