The Proportion of a Firm's Net Income Paid to Stockholders

question 98

Multiple Choice

The proportion of a firm's net income paid to stockholders is the ____ ratio.

• A) Payout
• B) Internal
• C) Earnings
• D) Retention
• E) net income

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Definitions:

Preemptive Right Provision

A clause in a contract that gives existing shareholders the right to buy new shares before the company offers them to the public, in order to maintain their fractional ownership.

Private Placements

The sale of securities directly to a limited number of private investors rather than through a public offering in the open market.

Term Loans

Loans from financial institutions that are provided with a set amount of money and a specified repayment schedule and maturity date.

Debt SEOs

Secondary Equity Offerings specifically oriented towards raising funds to pay down existing debt, involving the issuance of new stock.