Corporate Finance

QUESTION 1

A firm should only pay cash dividends during the maturity phase.
True

False

QUESTION 2

A stock dividend is a lower cost alternative to a cash dividend and can be considered at all but the initial stages of a corporate life cycle.
True

False

QUESTION 3

A poison pill strategy should be considered long before an invasive corporate raider attempts to buy your firm.
True

False

QUESTION 4

A dividend is an information signal to the marketplace about future prospects for the firm.
True

False

QUESTION 5

A consistent dividend policy should be known by the market and shareholders and should be maintained.
True

False

QUESTION 6

ESOP’s should be undertaken as a least cost incentive for employees to stick with the firm and grow it.
True

False

QUESTION 7

Firms can buy-back up to 10% of their own stock every six months.
True

False

QUESTION 8

Stock buybacks should be considered with other alternative investments, using the same criteria of payback, NPV or IRR.
True

False

QUESTION 9

Buybacks can be used to maintain a certain stock price range.
True

False

QUESTION 10

Buybacks are placed into treasury stock and can be used later as currency for acquisition.
True

False

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