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FIN 701 - Module 6 Pt 2 Exam Questions and Answers $10.49   Add to cart
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FIN 701 - Module 6 Pt 2 Exam Questions and Answers
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Cash Dividend - Answer-A cash payment made by a firm to the owners in the normal course of business, usually paid four times a year. Extra Cash Dividend - Answer-Paid over and above the regular dividend, and it may or may not be repeated Special Dividend - Answer-A one-time dividend paid over...

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  • August 23, 2024
  • 3
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • fin 701 module 6 pt 2 exam questions and answers
  • cash dividend answer a cash payment made by a fi

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  • FIN701
  • FIN701

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FIN 701 - Module 6 Pt 2 Exam Questions
and Answers
Cash Dividend - Answer-A cash payment made by a firm to the owners in the normal
course of business, usually paid four times a year.

Extra Cash Dividend - Answer-Paid over and above the regular dividend, and it may or
may not be repeated

Special Dividend - Answer-A one-time dividend paid over and above the regular
dividend and it won't be repeated. Unusual.

Liquidated Dividend - Answer-Payment which usually means that some or all the
business has been liquidated.

Dividend Payout ratio
Stability of dividends over time - Answer-A firm's dividend policy includes two
components:

Dividend Payout Ratio - Answer-Indicates amount of dividend paid relative to the
company's earnings.

Declaration Date - Answer-The Board of Directors declares dividends, after which the
dividends become a liability of the firm

Ex-Dividend Date - Answer-This date occurs 2 business days before date of record. •
This date is set to ensure that the right people receive the dividends.
• If you buy stock on or after this date, you will not receive the upcoming dividend
• Stock price generally drops by approximately the amount of the dividend

Record Date - Answer-Holders of record are determined on this date, and they will
receive the dividend payment

Payment Date - Answer-On this date checks are mailed. These days, the funds are
credited to your online trading account.

Less - Answer-A high dividend means retaining ___ of the firm's profits. (More or less?)

True - Answer-T/F: a smaller dividend payment will lead to less reliance on external
financing.

True - Answer-T/F: If the firm pays a large dividend, that means low profit retention,
which will then require heavy external equity financing.

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