Taggart Transcontinental shares are currently trading at $200 per share. The split ratio needed to bring the stock price down to $60 is:

		3:10
		10:3
		3:5
		3:10

The problem with the regular dividend policy from a firm's perspective is that ________.

		if the firm's earnings drop, the dividends may be low
		it regularly pays dividends which fluctuate with earnings
		even when earnings are low, the company must pay a fixed dividend
		it increases the shareholders' uncertainty

Use the following information to answer the question(s) below. Wyatt Oil has assets with a market value of $600 million, $70 million of which are cash. It has debt of $250 million, and 20 million shares outstanding. Assume perfect capital markets. If Wyatt Oil distributes the $70 million as a share repurchase, then the number of shares outstanding after the repurchase will be closest to:

		16.5 million
		16.0 million
		18.0 million
		17.5 million

Which of the following statements is FALSE?

		Firms adjust dividends relatively infrequently, and dividends are much less volatile than earnings. This practice of maintaining relatively constant dividends is called dividend signaling.
		The average size of the stock price reaction increases with the magnitude of the dividend change, and is larger for dividend cuts.
		When a firm increases its dividend, it sends a positive signal to investors that management expects to be able to afford the higher dividend for the foreseeable future.
		When managers cut the dividend, it may signal that they have given up hope that earnings will rebound in the near term and need to reduce the dividend to save cash.

Alpha Co. is paying a $.64 per share dividend today. There are 158,000 shares outstanding with a par value of $1 per share. As a result of this dividend, the:

		ommon stock account will decrease by $138,000
		capital in excess of par value account will decrease by $101,120
		retained earnings will decrease by $101,120.
		retained earnings will decrease by $99,360.
		common stock account will decrease by $101,120.