Dividends and dividend growth are Blank______ that drive share prices. Multiple choice question. the only factors some of the factors the least important factors

How does the market react to unexpected dividend changes? What does this tell us about dividendpolicy? How is it possible that dividends are so important, but at the same time, dividend policy isirrelevant?

Explain what ‘short selling’ means and how short-sellers profit from a fall in share prices.

What are the factors favoring a high-dividend policy?

Most prevalent types of dividend policy are – i. Regular dividend policy ii. Stable Dividend Policy ii. Irregular Dividend Policy iv. No Dividend Policy Briefly explain each of the above policies. Link Modigliani and Miller dividend theory and Bird in Hand theory of dividend to any of the above policies to which those theories can be linked most appropriately.

Suppose we observe from market data that, for a given non-dividend paying stock, See ImageWhat might explain the inequality in this relationship, is markets are efficient or does result in arbitrage opportunities?

Discuss the various arguments put forward by different schools of thoughts about dividend policy ie dividend irrelevance, dividend relevance, mid-roaders schools as well as the role of market imperfections in debate

Share Price can be determined by the cash flows and risk. Assume other things held constant, increased in risk will result in a. a lower share prices b. a higher share prices c. unchanged share price d. an undetermined share prices

We discussed several explanations for dividend levels by various firms. Which of the following would best help achieve the primary objective?   A. Firms should be reluctant to increase dividends B. Taking into account taxes and costs, dividends are irrelevant C. Dividend decisions should be made with a perspective on the cost of capital, project analysis, and shareholder value D. Signaling should be the most important consideration  E. None

The residual theory of dividends argues that dividends a. can only be distributed if there is income remained after funding all prospective investment b. not relevant unless there is an excess demand for cash dividends c. are irrelevant in any dividend distribution plan d. are necessary and important to maintain the market price of any ordinary shares