Question : 31) The net effect of a stock repurchase ________. A) similar : 1415230

 

31) The net effect of a stock repurchase is ________.

A) similar to an interest payment

B) similar to a cash dividend

C) similar to a stock split

D) similar to a reverse stock split

32) Which of the following is true of a dividend payout?

A) When a firm announces that it will increase its dividend, the share price usually decreases on that news.

B) Dividend payments send a positive signal to investors in the marketplace that management believes that the stock is overvalued.

C) When a firm pays out dividends the share price will fall.

D) Dividend payouts have no impact on the share price of a stock in an efficient market.

33) Which of the following methods can be utilized by a firm when it wants to purchase outstanding shares of common stock?

A) a purchase of stock through private placement

B) a tender offer at varying prices

C) a tender offer at a specified price

D) an European auction plan

34) Repurchase of stock ________ the earnings per share and ________ the market price of stock.

A) increases; increases

B) decreases; decreases

C) increases; decreases

D) decreases; increases

35) In a Dutch auction, ________.

A) a firm offers to repurchase a fixed number of shares, at a discount

B) a firm offers to repurchase a fixed number of shares, at a premium

C) a firm specifies a range of prices at which it is willing to repurchase shares and the quantity of shares that it desires

D) a firm enables stockholders to use dividends received on the firm's stock to acquire additional shares

36) Under the Jobs and Growth Tax Relief Reconciliation Act of 2003, the maximum rate of taxation on dividends received by shareholders was set at ________.

A) 18%

B) 20%

C) 25%

D) 15%

37) A dividend reinvestment plan enables stockholders to ________.

A) reinvest the dividends in money market instruments which are risk free

B) reinvest all dividends in the firm with no accompanying increase in equity

C) acquire additional dividends through redemption of stock

D) acquire shares at little or no transaction costs

38) At the quarterly meeting of Tangshan Mining Corporation, held on September 10th, the directors declared a $1.00 per share dividend for the firm's 100,000 shares of common stock outstanding. The net effect of declaring and paying this dividend would be to ________.

A) decrease total assets by $100,000 and increase stockholders equity by $100,000

B) decrease total assets by $100,000 and decrease stockholders equity by $100,000

C) increase total assets by $100,000 and increase stockholders equity by $100,000

D) increase total assets by $100,000 and decrease stockholders equity by $100,000