YELLOW MEANS I ANSWERED IT CORRECTLY

EACH QUESTION IS WORTH 2 POINTS I GOT 10 OUT OF 20

THE GRAY AND GREEN ARE ANSWERS FROM OTHER TUTORS.

PLEASE ANSWER ALL

THE BUBBLE IS WHAT I SELECTED DURING THE QUIZ

1. An investor owns 1000 shares of stock in ABC Corp. with a market value of $1,200.ABC declares a 20% stock dividend.After the dividend is paid, John owns____________

1200 shares with a market value of $1,000.

1000 shares with a market value of $1,200

1200 shares with a market value of $1,200.

1200 shares with a market value of $1,000.

2. A firm has 50,000 shares of stock outstanding, net income of $100,000, and a PE ratio of 15. What will the firms PE ratio be if the firm repurchases 10,000 shares? Assume all else remains constant.

12.0

13.0

14.0

15.0

3. A firm currently has 200,000 shares of stock outstanding at a market price per share of $60. Today, the firm announced a 3-for-2 stock split. What will the price per share be after the split?

$29.00

$38.00

$40.00

$60.00

4. The ex-dividend date is ________ the holder of record date.

2 days before

5 days before.

2 weeks before

3 days after.

5. Which of the following transactions will not affect a corporation's retained earnings?

stock repurchase

increase dividend payments

stock dividend

cut dividend payments

6. The higher the dividend payout ratio, the more a company must rely on external financing.

True

False

7. An investor purchased 300 shares of ABC Inc. stock on Tuesday, December 15.ABC paid its quarterly dividend of $1.10 a share on Thursday, December 31. The record date was Friday, December 18. How much dividend income did the investor receive on December 31 from his investment in ABC stock?

$0.00

$110

$165

$330

8. A firm declared a dividend of $2 per share, which was an increase of 25% from the prior year, yet the stock declined by 3% the day of the announcement.Another firm declared a dividend of $2 per share, which was the same as the prior year, and its stock increased in value by 2% on the day of the announcement.These events could be most readily explained by the _________

Information effect.

Residual dividend theory.

Clientele effect.

Expectations theory.

9. The residual dividend theory suggests that dividends should be paid to stockholders first and then what is left can be reinvested by the firm.

True.

False.

10. Which one of the following is probably the best argument in favor of a stock split?

to lower the current stock price to its normal trading range

to provide additional shares to all its shareholders

to avoid delisting

to increase the value of the firm

Attempt Score

10 out of 20 points