Practice Test

Q1) If ESP of the firm is Rs. 10 and retention is 0%; the dividend payout would be. Show Answer

Q2) Dividend declared between two Annual General Meetings (AGM’s) is termed as______. Show Answer

Q3) Walter’s model suggests for 100% DP ratio when Show Answer

Q4) Walter’s model suggests that a firm can always increase the value of the share by Show Answer

Q5) ‘ Bird in hand’ argument is given by Show Answer

Q6) Residual’s theory argues that dividend is as Show Answer

Q7) Dividend irrelevance argument of MM model is based on Show Answer

Q8) Which of the following is not true for MM model? Show Answer

Q9) Which of the following stresses on investor’s preference for current dividend than higher future capital gains? Show Answer

Q10) MM Model of dividend irrelevance uses arbitrage between Show Answer

Q11) MM model argues that dividend is irrelevant as Show Answer

Q12) Which of the following represents passive dividend policy? Show Answer

Q13) In case of Gordon’s model, the MP for zero payout is zero. It means that Show Answer

Q14) Gordons model of dividend relevance is same as Show Answer

Q15) Part of incomes distribute to shareholder Show Answer

Q16) Dividends are payment which are Show Answer

Q17) The irrelevance theory of dividend was supported by Show Answer

Q18) The relevance theory of dividend was supported by Show Answer

Q19) The most common form of dividend payment is Show Answer

Q20) Constant payout ratio means Show Answer

Q21) Guideline for issue of bonus shares are issued by Show Answer

Q22) Constant payout ratio means by Show Answer

Q23) Dividend is payable to Show Answer

Q24) Ploughing back of profit means Show Answer

Q25) The models knows as bird in the hand argument Show Answer

Q26) The approvable to dividend policy are Show Answer

Q27) The factor not considered for determination of dividend policy is Show Answer

Q28) The profit which is distributed as dividend is knows as Show Answer

Q29) Payment of fixed dividend is knows as Show Answer

Q30) The policy in which less dividend is paid is Show Answer

Q31) Dividend which is declared before declaration of final dividend is called as Show Answer

Q32) Relationship between dividend per share and earnings per share is knows as: Show Answer

Q33) Different investors have different views on present cash dividends and future capital gains. Show Answer

Q34) In real life company has no external financing apart from retained earnings. Show Answer

Q35) Investors are risk averse. Show Answer

Q36) Hybrid Dividend Policy is a combination between the residual and stable dividend policy. Show Answer

Q37) Dividend is a part of retained earnings. Show Answer

Q38) Dividend is compulsorily payable to preference shareholders. Show Answer

Q39) Effective dividend policy is an important tool to achieve the goal of wealth maximization. Show Answer

Q40) Dividend payout ratio refers to that portion of total earnings which is distributed among shareholders. Show Answer

Q41) % Rate of dividend is also known as dividend payout ratio. Show Answer

Q42) There is a difference of opinion on relationship between dividend payment and value of the firm. Show Answer

Q43) Walter’s model supports the view that dividend is relevant for value of the firm. Show Answer

Q44) Gordon’s model suggests that dividend payment does not affect the market price of the share. Show Answer

Q45) Residual theory says that dividend decision is no decision. Show Answer

Q46) MM model deals with irrelevance of dividend decision. Show Answer

Q47) MM model is a fool proof model of dividend irrelevance. Show Answer

Q48) In the arbitrage process of MM model, the dividends paid by a company are replaced by fresh investment. Show Answer

Q49) MM model asserts that value of the firm is not affected whether the firm pays dividend or not. Show Answer

Q50) Dividend is paid in kind .

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Q51) Dividend is paid in cash.

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Q52) Board of director decide the dividend policy

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Q53) Dividend becomes a liability when it is recommended by directors Show Answer

Q54) While issuing stock dividend SEBI guideline should be complied with Show Answer

Q55) During boom dividend may be paid of lower rate.

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Q56) External loan affect dividend paying ability of the organisation.

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Q57) Stable dividend policy ensures stable dividend to the shareholder organisation.

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Q58) Liquidity has no effect on dividend policy

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Q59) Dividends paid to the shareholders are always reinvested by all the shareholders further, to get higher returns. Show Answer

Q60) Dividends are the cash flows returned to the shareholders Show Answer

Q61) Dividend signaling is a theory that suggest that when a company announcement of an increase in dividend pay-outs is an indication of future instability. Show Answer