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BUS 5440 Final Exam 1, Questions And Answers $10.49   Add to cart

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BUS 5440 Final Exam 1, Questions And Answers

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BUS 5440 Final Exam 1, Questions And Answers.Your test grade is 93.33% The professor has configured this test to allow students to: Show Questions Answered Correctly Show Questions Answered Incorrectly Show All Responses Selected By Student Show What The Correct Response Shou...

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  • July 14, 2023
  • 11
  • 2022/2023
  • Exam (elaborations)
  • Questions & answers
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Test Review -
Your test grade is 93.33%
The professor has configured this test to allow students to:

Show Questions Answered Correctly


Show Questions Answered Incorrectly


Show All Responses Selected By Student


Show What The Correct Response Should Be




QUESTION: 1
TYPE: MULTIPLE CHOICE
[QUESTION BANK ID: 269594]


CORRECT


Which of the following statements is correct?

A

One advantage of dividend reinvestment plans is that they enable investors to avoid paying taxes on the dividends they receive




B

If a company has an established clientele of investors who prefer a high dividend payout, and if management wants to keep stockholders happy, it
should not follow the strict residual dividend policy


C

If a firm follows a strict residual dividend policy, then, holding all else constant, its dividend payout ratio will tend to rise whenever the firm’s
investment opportunities improve


D

If Congress eliminates taxes on capital gains but leaves the personal tax rate on dividends unchanged, this would motivate companies to increase
their dividend payout ratios


E

Despite its drawbacks, following the residual dividend policy will tend to stabilize actual cash dividends, and this will make it easier for firms to
attract a clientele that prefers high dividends, such as retirees




QUESTION: 2
TYPE: MULTIPLE CHOICE
[QUESTION BANK ID: 269596]


CORRECT


Langston Labs has an overall (composite) WACC of 10%, which reflects the cost of capital for its average asset. Its assets vary widely in risk, and Langston

evaluates low-risk projects with a WACC of 8%, average-risk projects at 10%, and high-risk projects at 12%. The company is considering the following projects


A High 15%

,

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