FIN 5650 Final Exann Fall, 2017 Name Multiple Choice: 3 points each + one free p

Question

FIN 5650 Final Exann Fall, 2017 Name Multiple Choice: 3 points each + one free point-100 points 1) The dividend a mount divided by the earnings per share amount is referred to as the dividend A) yield B) per share payment D) payout declaration 2) Which one of these actions is m the firm? ost apt to affect the total value of a stockholder's investment in A) Enacting a two-for-one stock split Forgoing a positive NPV project in order to increase the dividend amount C) Paying a special dividend D) Enacting a five-for-three reverse stock split E) Repurchasing shares is an alternative method to cash dividends that is used to distribute a firm's arnings to shareholders.

Explanation / Answer

2)

Net present value = PV of cash inflows - PV of cash outflows

Projects with positive NPV should be accepted. Positive NPV projects increases the firm value, thereby causes share value to increase.

Hence, correct option is (B).

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