When a Firm Pays Out a Dividend, the Share Price

question 78

Multiple Choice

When a firm pays out a dividend, the share price ________, and when it conducts a share repurchase at the market price, the share price ________.

• A) increases, increases
• B) is unchanged, decreases
• C) decreases, decreases
• D) decreases, is unchanged

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Definitions:

Foreign Firms

Companies that operate in a country other than where their headquarters are located.

Import Tariff

A tax imposed by a government on goods and services imported from other countries, intended to protect domestic industries and adjust trade balances.

Import Quota

A limit imposed by a nation on the quantity (or total value) of a good that may be imported during some period of time.

Restrictive

A term used to describe policies or measures that limit or control some form of activity or process.