PALP Week 9

The central questions of the dividend policy question are

(1)Should the firm pay out money to its shareholders? OR

(2) Should the firm take that money and invest it for its shareholders?

Please state True or False .

Positive Free Cash Flows – Indicates the firm's cash remaining after deducting its expenses.

Please state True or False

All of the following is done by company If there is a surplus cash , except

• Repay the company's debts and obligations

• Apply for loans

• Conduct share buyback

• Payout dividends

How firms repurchase stocks ?

( choose more than one option if applicable )

• Closed market repurchase

• Targeted repurchase

• Dutch auction

• Bond trading market

When investors have no access to insider information about the firm’s decision-making and level of risk, they rely on the firm’s actions. This is a result of __________ information.

According to signal theory , if signal is negative , the share price

Efficient market-hypothesis (EMH) is a hypothesis that assumes that an asset prices reflect all current available information. Which option is not related to EMH ?

• Economic Interest

  efficiency

• Weak-form efficiency

• Strong form efficiency

• Semi-strong form efficiency

Method to consider when a firm repurchase shares and dividends , percentage return the investors expects and distribution of dividend is considered in all the following formulas except ?

• Total payout model

• Dividend yield

• Dividend payout

• Quick ratio