(1) If shareholders anticipate receiving a regular dividend what advantage would they receive if the
firm repurchases.
(2) In what circumstances will a share repurchases result in earnings to fall?
(3) Share repurchases have a “signalling effect” and thereby affect the investor’s view of the
company’s future.
True
False
(4) A company declared a dividend on November 7, payable December 28 to stockholders of record
on Friday December 7. What is the latest date by which a shareholder can purchase the share and still
be eligible to receive the dividend declared?
A) November 3
B) November 4
C) November 5
D) November 6
(5) When a firm return cash to its shareholders. The only way to do so is to pay a dividend.
True
False
(6) Firms repurchase their own shares because:
I. They have accumulated large amount of excess cash
II. They want to change their capital structure
III. They want to substitute it for regular dividends
A) I only
B) II only
C) I and II only
D) III only
(7)Dividend payments alter the capital structure of a firm by replacing equity with debt.
True
False
(8)Share repurchase may indicate undervalued shares.
True
False
(9)Companies that have surplus cash but no positive net present value projects are likely to pay out
these excess funds. Briefly explain the consequences of this statement.
(10)Share repurchases provide companies the flexibility in distribution cash to shareholders.
True
False
NB. No title page, No reference is needed. just to answer the 10 questions. and a very short
explanation.
