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Created by dylan_earl
over 9 years ago
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Question | Answer |
Difference between declaration date and ex declaration date | Ex determines whether a stockholder is entitled to a dividend payment (anyone holding before date is entitled) Declaration date is when dividend for next quarter is declared |
What is a reverse split | Issue of new shares in exchange for old shares which results in reduction of outstanding shares |
Define: Dividend Reinvestment Plan (DRIP) | Enables shareholder to reinvest dividends into new shares |
What is a stock repurchase | When firm buys back stock from its shareholders |
What is the irrelevancy of Dividend Policy | Since investors do not need dividends to convert shares to cash, they will not pay higher prices for firms with higher dividend payouts. (therefore no impact) |
What is the clientele effect? | Natural clients for high payout stocks. These clients increase price of stock through demand for dividend paying stock Dividend increases signal a company good fortune. |
If dividends are taxed heavier than capital gains, policy of high paying dividends helps the firm T/F | False, Hurts the firm |
In Canada, both capital gains and dividends are taxed at lower rate than interest and other types of incomes T/F | True |
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