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Stock dividends are an alternative to cash dividends. Which of the following statements are true with respect to stock dividends? Select one: O a. A
Stock dividends are an alternative to cash dividends. Which of the following statements are true with respect to stock dividends? Select one: O a. A firm with 1,500,000 shares currently issued and outstanding declares a 5% stock dividend. The firm would issue an additional 75,000 shares O b. If the stock is currently selling at $10 per share and the firm has no current period Net Income, the Retained Earnings account will drop by $750,000 due to the payment of the stock dividend O c. A shareholder receiving a stock dividend is taxed exactly as if they had received a cash dividend O d. All of the above are true O e. Only a. and b. above are true Which of the following statements are true regarding dividends? Select one: O a. Liquidating dividends are used when the share capital of the company is being reduced O b. A corporation cannot pay a dividend if doing so would make it insolvent O c. Different shareholders within a single class of shares can be paid different dividends on a per share basis. For example, both Joe & Mary own Class A shares. Joe can be paid a dividend of $0.25 per share while Mary can be paid a dividend of $0.50 per share. O d. All of the above statements are true O e. Only statements a. and b. above are true. Aswath Damodaran explains relative valuation by using the analogy of a real estate agent selling a house. Which of the following statements are true with respect to relative valuation? Select one: O a. Relative valuation begins with identifying comparable assets, such as similar houses that have recently sold in the neighborhood O b. Relative valuation relies on standardized prices, which allow for comparison between similar but not identical assets. An example of a standardized price might be the price per square foot. O c. If the average price per square foot of comparable quality houses is $500 and we want to buy a 3,000 square foot house, we could expect to pay $1,000,000 O d. Only a. and b. above are true statements O e. All of the above are true statements
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