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10 questions
What form of investment income is the result of a company distributing some/all of its profits to shareholders?
Capital Gain
Dividend
Interest
Premium
What type of company is more likely to pay a dividend?
Growth-oriented
Start-up
Mature
Unprofitable
If a company has a stated dividend policy, the payment of the dividend is a legal obligation.
True
False
In order to pay a dividend, a company must be profitable or have reserves accumulated from prior periods.
True
False
Which of the following is FALSE regarding Dividend Reinvestment Plans?
May be arranged with broker or through issuing company
Shares can be offered at a discount
Shares are acquired without a commission
Fractional share purchases are not permitted
The date when the Board of Directors announces the dividend.
Payment Date
Date of Record
Declaration Date
Ex-Dividend Date
If you buy a stock before the date of record, you will receive the dividend.
True
False
If you purchase the shares on May 28, do you receive the dividend?
Yes
No
If you purchase the shares on May 27, do you receive the dividend?
Yes
No
A very high dividend yield (%) may indicate which of the following?
The stock is undervalued
The stock is overvalued
Investors are anticipating a dividend cut
Future profits are expected to accelerate
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