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- How are share repurchases an alternative to dividends, and why might investors prefer them?Why is there a cost for retained earnings? Group of answer choices Earnings can be reinvested or paid out as dividends Investors could buy other securities, earn a return Neither EitherWhen purchasing shares is it preferrable to purchase in anticipation of appreciation or of dividends? Do certain investors have different needs?
- What are the advantages and disadvantages of higher dividends to investors?Why might a stock dividend or a stock split be of limited value to an investor? Please explain your answerThe bird-in-the-hand argument espousing the importance of dividends or dividend relevance suggests that investors view a current (certain) dividend as less risky than future (uncertain) dividends or capital gains; nevertheless, proponents of this theory argue that this will have no significant impact on share price. Is this true or false
- What are the benefits of a stock buyback to investors?Which of the following is NOT a reason for a high-dividend-payout policy? A. convenient and direct deposit of cash dividend B. avoidance of transaction costs for selling shares C. higher potential future returns for shareholders D. cash payments today versus uncertain cash payments tomorrowWhere can investors buy and sell preferred stock from other investors?
- Would would an investor prefer to receive a distribution as a dividend? Answers: Lower tax rate on dividends than capital gains Higher tax rate on dividends than capital gains Greater certainity Greater uncertainityThe residual theory of dividends argues that dividends a. can only be distributed if there is income remained after funding all prospective investment b. not relevant unless there is an excess demand for cash dividends c. are irrelevant in any dividend distribution plan d. are necessary and important to maintain the market price of any ordinary sharesQuestion Which of the following is NOT a reason for a high-dividend-payout policy? A. convenient and direct deposit of cash dividend B. avoidance of transaction costs for selling shares C. higher potential future returns for shareholders D. cash payments today versus uncertain cash payments tomorrow
