Stable dividend vs constant payout ratio policies — Flashcards

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Stable dividend vs constant payout ratio policies — Flashcards

10 flashcards

Read Study Notes Questions

Dividend coverage ratio =

Agency costs affect on company's dividend payout policy. Between shareholders & bondholders?

after tax cost of funds

number of treasury shares =

Share repurchase methods

Tax aversion theory?

5 types of dividends

Stock dividends & splits affect on capital structure?

Effects of repurchasing shares using debt

#10

Sustainable growth rate. SGR =

Stable dividend vs constant payout ratio policies CFA Flashcards - Medical Study Cards

Master Stable dividend vs constant payout ratio policies with Oncourse flashcards. These spaced repetition flashcards are designed for medical students preparing for NEET PG, USMLE Step 1, USMLE Step 2, MBBS exams, and other medical licensing examinations.

Stable dividend vs constant payout ratio policies Flashcard Deck - 10 Cards

Flashcard 1: Dividend coverage ratio =

Answer: \= net income / dividends\ high ratio indicates dividend increase

Flashcard 2: Agency costs affect on company's dividend payout policy. Between shareholders & bondholders?

Answer: conflict resolved via provisions in the bond identure (may include restrictions on dividend payment, maintenance of certain BS ratios, etc)

Flashcard 3: after tax cost of funds

Answer: \= (after-tax cost of borrowing)(shares repurchased)(buyback share price)

Flashcard 4: number of treasury shares =

Answer: \= assumed proceeds / average share price during reporting period

Flashcard 5: Share repurchase methods

Answer: - open market transactions - fixed-price tender offer: buy fixed # of shares at premium (fastest process) - Dutch auction: range of prices, identify minimum clearing price, the price of last offer accepted (highest accepted bid price) is price paid - direct negotiation: purchase from major shareholder, usually at discount

Flashcard 6: Tax aversion theory?

Answer: investors prefer not to receive dividends due to higher tax rates than capital gains

Flashcard 7: 5 types of dividends

Answer: 1. regular cash dividends 2. special dividends 3. liquidating dividend: paid when part or all of firm is sold or when dividends in excess of cumulative retained earnings are paid 4. stock dividend: more shares, increase stock's float 5. stock splits: like stock dividends but larger in size

Flashcard 8: Stock dividends & splits affect on capital structure?

Answer: no affect on capital structure or ratios - stock dividend: decrease in retained earnings offset by increase in contributed capital - stock split: no affect on book value of equity or tax basis for shareholders

Flashcard 9: Effects of repurchasing shares using debt

Answer: - less of an increase in EPS than using cash - EPS will increase if the after-tax funding cost is less than the earnings yield

Flashcard 10: Sustainable growth rate. SGR =

Answer: \= b\*ROE\ b: retention rate

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Stable dividend vs constant payout ratio policies Flashcards for CFA

Study 10 flashcards on Stable dividend vs constant payout ratio policies for CFA Corporate Finance (Level II). These active recall cards cover the key concepts, clinical associations, and high-yield facts from this chapter of Analysis of Dividends and Share Repurchases. Each card is designed to test your understanding rather than just recognition, building stronger and more durable memories for exam day.

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There are 10 flashcards for Stable dividend vs constant payout ratio policies, covering the key concepts, clinical correlations, and high-yield facts from this chapter of Analysis of Dividends and Share Repurchases.

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Yes. This page covers one chapter of Analysis of Dividends and Share Repurchases. Visit the topic page to see all chapters and their flashcards under Corporate Finance (Level II).

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