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Question
A firm that maintains stable cash dividends will generally not increase the dividend unless:A) a stock split occurs.
B) the firm merges with another profitable firm.
C) the firm is sure that a higher dividend level can be maintained.
D) the price-earnings (P/E) ratio increased steadily over the past five years.
Answer
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Related questions
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A) The net present value.
B) The internal rate of return.
C) The profitability index.
D) The modified internal rate of return.
Q:
Initial Outlay Cash Flow in Period
1 2 3 4
-$4,000 $1,546.17 $1,546.17 $1,546.17 $1,546.17
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Year 2 = $3,000
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The equivalent annual cost method is most appropriate in which of the following situations? In each case, assume that several mutually exclusive options are available.
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B) Adding another store to a chain of retail stores
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WSU Inc. has various options for replacing a piece of manufacturing equipment. The present value of costs for option Ell is $84,000. Option Ell has a useful life of 5 years; annual operating costs were discounted at 9%. What is the equivalent annual cost?
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The size of capital investments and the difficulty in reversing them once they are made make capital-budgeting decisions very important to the firm.
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Competitive market forces make it imperative for a firm to have a systematic strategy for generating capital-budgeting projects.
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Good capital investment opportunities are most likely to exist when:
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Q:
P/E ratios found in published sources or on the internet are always computed by dividing the next period's expected earnings into the current price of the stock.
Q:
Apple stock is now selling for $315.32 per share. The P/E ratio based on current earnings is 23.72 and the P/E ratio based on expected earnings is 17.48. The expected growth rate in Apples earnings must be:
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B) 36%.
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D) 5.5%.
Q:
If the ROE on a new investment is less than the firm's required rate of return:
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B) the investment leaves the firm's value unchanged.
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Q:
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A) .07.
B) 14.
C) 2.14.
D) 30.
Q:
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Q:
You are considering the purchase of AMDEX Company stock. You anticipate that the company will pay dividends of $2.00 per share next year and $2.25 per share the following year. You believe that you can sell the stock for $17.50 per share two years from now. If your required rate of return is 12%, what is the maximum price that you would pay for a share of AMDEX Company stock?
Q:
Draper Company's common stock paid a dividend last year of $3.70. You believe that the long-term growth in the dividends of the firm will be 8% per year. If your required return for Draper is 14%, how much are you willing to pay for the stock?
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Q:
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Q:
By virtue of its nature, dividend policy is inherently a wealth-creating activity for the firm's owners.
Q:
Dividend payout ratios are generally much lower for small or newly established firms than for large, publicly owned firms.
Q:
The dividend declaration date is the date at which the stock transfer books are to be closed for determining the investor to receive the next dividend payment.
Q:
The ________ designates the date on which the stock transfer books are closed in regard to a dividend payment.
A) declaration date
B) ex-dividend date
C) date of record
D) payment date
Q:
Five years ago, Mr. Martinez purchased 1000 shares of JPM stock at $50 per share. If Mr. Martinez ' tax rate is 25% would he prefer that the company pay a $5.00 per share dividend or offer to repurchase 100 shares at $50 per share?
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B) It would make no difference because he would receive $5,000 either way.
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Q:
For accounting purposes, a stock split has been defined as a stock dividend exceeding:
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B) 35%.
C) 45%.
D) 55%.
Q:
A stock dividend will cause changes in the dollar value of which of the below capital accounts?
A) Common stock
B) Additional paid-in capital
C) Retained earnings
D) All of the above
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A) There is not enough information to know.
B) EPS will increase by 10%.
C) EPS will not be affected by the stock dividend.
D) EPS will decrease by 10%.