Attempts

Average $/1$

Basic concepts $-$ Dividends and stock repurchases

Select the term that corresponds to each of the given descriptions. $($Note: There is only one possible answer for each description.$)$

Descriptions

Terms

According to this policy, the firm's dividend is calculated as the difference between the firm's net income

and the retained earnings needed to finance the firm's optimal capital budget.

If a firm's net income varies from year to year, this dividend policy exposes a shareholder to uncertainty

regarding the amount of dividends to be received each year.

If a shareholder owns a firm's shares on this date, he or she will receive the firm's next declared

dividend.

Under this theory, management is reluctant to increase their stock's annual dividend unless they have

expectations of increased sustainable future earnings from which to pay the dividends.

An earnings distribution activity in which a firm's net income is used to increase the treasury stock

holding via purchases in the financial markets.

Constant payout ratio

Dividend irrelevance theory

Dividend reinvestment plans

Holder$-$of$-$record date

Information content hypothesis

Optimal dividend policy

Residual dividend policy

Stock dividend

Stock repurchase

Stock split