Bilbao Vizgaggins Owns Shares in a Company That Does Not

question 9

Multiple Choice

Bilbao Vizgaggins owns shares in a company that does not pay dividends.Unfortunately,Vizgaggins requires a $100,000 dividend this period.If Vizgaggins owns 10,000 shares in the company and they are worth $200 per share,what can he do to produce the effect of the required dividend (ignore all tax effects) ?

• A) sell 500 shares of his stock
• B) sell 5000 shares of his stock
• C) buy 500 more shares of the stock
• D) there is nothing that he can do

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Definitions:

Amortization of Prior Service Costs

The process of gradually writing off the initial costs of services received or obligations incurred in the past, over the service periods of the involved employees.

Pension Accounting and Reporting

The process of recording and communicating information regarding a company's pension obligations and related costs in its financial statements.

Fund Asset Gains and Losses

Changes in the value of investment holdings in a fund that impact its overall performance.

Expected Rate of Return

The anticipated return on an investment over a specific period, taking into account both the risk of the investment and historical performance trends.