University of Louisiana, Lafayette - FNAN 522 Module 6 Homework

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Started on Monday, 2 December 2019, 3:15 PM State Finished Completed on Monday, 2 December 2019, 3:21 PM Time taken 5 mins 56 secs Marks 15.00/15.00 Grade 20.00 out of 20.00 (100%) A company mad... e $10 million in revenue, recorded $2 million in net income, and paid $750,000 in dividends last year. What was the company's pay out ratio last year? Select one: a. 7.5% b. 20.0% c. 37.5% d. 2.7% In which of the following situations would a shareholder prefer to receive stock dividends as opposed to cash dividends? Select one: a. Cash dividends and stock sales are both taxed using capital gain rates. b. The investor wants to minimize the taxes due on investment income. c. The investor is looking to own shares in the company for a long period of time. d. All of these answers FNAN522-020_860-202020 https://www.coursehero.com/file/53009658/Module-6-Homeworkpdf/ This study resource was shared via CourseHero.com Question 3 Correct Mark 1.00 out of 1.00 Question 4 Correct Mark 1.00 out of 1.00 The Modigliani-Miller theory suggests that it doesn't matter to a shareholder whether a company issues dividends. Why might that theory not be applicable to the US stock market as it currently exists? Select one: a. Dividends and share repurchases are taxed at different rates. b. There are transaction costs associated with trading stock. c. All of these answers. [Show More]

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