Dividend Reinvestment Schemes Are a Significant Source of Equity for Many

question 13

Multiple Choice

Dividend reinvestment schemes are a significant source of equity for many Australian companies.Which of the following advantages of dividend reinvestment schemes may,at times,also be regarded as a disadvantage?

• A) The shareholder avoids transaction costs on the share issue.
• B) The share issue price is usually at a discount to the average market price.
• C) Such schemes allow dividends to be paid while retaining cash for future growth.
• D) The company is able to pass on franking credit to its shareholders.

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Definitions:

Programmed Aging

The theory that aging is a biological process controlled by specific genes.

Tertiary Aging

The progression of changes in an individual that are due to disease, rather than due to normal aging or genetics.

Lifespan

The length of time a living being, especially a human, exists from birth to death.

Healthy Life Expectancy

The average number of years that an individual is expected to live in a state of good health, subtracting years of ill health adjusted for severity.