Dividend Types and Policy Quiz
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Questions and Answers

What is a dividend?

  • A payment made out of a firm's earnings to its owners, in the form of either cash or stock (correct)
  • A payment made by a firm to its employees
  • A payment made by a firm to its creditors
  • A payment made by a firm to its suppliers
  • What is the difference between cash and stock dividends?

  • Cash dividends are paid in currency, while stock dividends are paid in shares of the issuing company (correct)
  • Cash dividends are paid to creditors, while stock dividends are paid to owners
  • Cash dividends are paid to employees, while stock dividends are paid to shareholders
  • Cash dividends are paid annually, while stock dividends are paid quarterly
  • Why are share repurchases considered an alternative to dividends?

  • To increase the number of outstanding shares
  • To avoid paying taxes on dividends
  • To decrease the number of outstanding shares (correct)
  • To provide shareholders with a cash payment
  • What does dividend policy refer to?

    <p>The decision-making process for determining the amount and timing of dividend payments</p> Signup and view all the answers

    What are real-world factors favoring a low dividend payout?

    <p>High growth opportunities for the firm</p> Signup and view all the answers

    Dividend is a payment made out of a firm’s earnings to its owners, in the form of either cash or stock. Distribution is a payment made by a

    <p>firm to its shareholders</p> Signup and view all the answers

    Stock Repurchases: An Alternative to Cash Dividends. What We Know and Do Not Know about Dividend and Payout Policies. © McGraw Hill 17-3 CASH DIVIDENDS AND DIVIDEND PAYMENT Dividend is a payment made out of a firm’s earnings to its owners, in the form of either cash or stock. Distribution is a payment made by a

    <p>firm to its shareholders</p> Signup and view all the answers

    Real-World Factors Favoring a High Dividend Payout. A Resolution of Real-World Factors. Stock Repurchases: An Alternative to Cash Dividends. What We Know and Do Not Know about Dividend and Payout Policies. © McGraw Hill 17-3 CASH DIVIDENDS AND DIVIDEND PAYMENT Dividend is a payment made out of a firm’s earnings to its owners, in the form of either cash or stock. Distribution is a payment made by a

    <p>firm to its shareholders</p> Signup and view all the answers

    Distribution is a payment made by a firm to its

    <p>shareholders</p> Signup and view all the answers

    Dividend is a payment made out of a firm’s earnings to its owners, in the form of either cash or stock. Distribution is a payment made by a firm to its

    <p>shareholders</p> Signup and view all the answers

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