A Dividend Cut Usually

question 57

Multiple Choice

A dividend cut usually

• A) is done with great reluctance by the Board of Directors.
• B) sends a negative signal to the market.
• C) results in the firm's share value falling.
• D) all of the above.

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Definitions:

Subscription Price

The fixed price at which existing shareholders can buy more shares of the company stock, typically during a rights offering.

Market Price

The ongoing market valuation for buying or selling assets or services.

Rights Offering

A way companies raise capital, where existing shareholders are given the right to purchase additional shares at a discount before the new shares are offered to the public.

Subscription Price

The price at which existing shareholders can purchase additional shares of stock in a company, often at a discount from the current market price.