a. Explain the stock price behavior on the ex-dividend date and why that happens.

b. Explain why stock repurchase has become an important way to distribute earnings to stockholders. In other words, discuss advantages of stock repurchase compared to cash dividends.

c. Discuss what firms should or should not do regarding dividend and payout policy under two scenarios: firms without sufficient cash, firms with sufficient cash.

Answer rating: 100% (QA)

a The stock price usually falls on the ex d ivid end date because the dividend is no longer included in the stock price This happens because the divid... View the full answer