True or false
When a firm increases its common stock dividend, it must also increase its preferred stock dividend.
False,
Preferred dividends are fixed at a certain percentage and it is not required to increase its preferred stock dividend when increasing a common stock dividend.
True or false When a firm increases its common stock dividend, it must also increase its...
Judy's Boutique just paid an annual dividend of $2.65 on its common stock. The firm increases its dividend by 3.40 percent annually. What is the rate of return on this stock if the current stock price is $39.64 a share?
To receive a dividend on common stock, an investor must purchase the stock before the ex- dividend date. True or False
True/ false & Why Contributed capital is equivalent to paid-in capital. Common stock is considered the legal capital of the corporation. Cumulative preferred stock means the stock is entitled to its regular dividend plus an additional share of the total amount of declared dividends. A corporation is a legal entity separate from its owners; it may sue and be sued, but it may not own property in its own name.
True or False: Increases in the market value of a stock generate capital gains when the stock is sold
4. A 5% stock dividend reduces a firm's total equity. a. True b. False 5. A cash dividend reduces the firm's assets. a. True b. False 7. Once a firm has earnings, management has essentially two choices: distribute or retain them. a. True b. False 8. Federal income taxes favor the retention of earnings over the distribution of earnings. a. True b. False 9. A stock dividend has no impact on a firm's liabilities or the price of its stock....
Which of the following is the most typical example of a zero-growth dividend stock? The common stock of a firm in the biotechnology industry. The common stock of a firm in the health care industry. The common stock of a firm in the information technology industry. The preferred stock of a utility company.
True or false If the profits of a business increase from one year to the next, the company will usually increase the preferred stock dividend amount.
Cost of new common stock A firm needs to take flotation costs into account when it is raising capital fromissuing new common stock . True or False: The following statement accurately describes how firms make decisions related to issuing new common stock. If a firm needs additional capital from equity sources once the retained earnings breakpoint is reached, it will have to raise the capital by issuing new common stock. True: Firms will raise all the equity they can from...
Which of the following is the least expensive capital for the firm? Bond capital Preferred Stock capital Common Stock capital What will happen to your yield when you pay more for an investment, holding all else constant? The yield will go down The yield will go up The yield could go up or down The yield should not be affected Which of the following is a true statement? The cost of bond capital for the firm is not tax deductible...
Southern Union recently paid a $2.50 annual dividend on its common stock. This dividend increases at a rate of 4.5 percent per year. The stock is currently selling for $30 a share. What is the required rate of return? Select one: a. 11.60 percent b. 12.83 percent 10.53 percent d 14.07 percent e. 13.21 percent