Neonia, Co

question 66

Multiple Choice

Neonia, Co. has a policy of returning at least 25 percent of earnings to shareholders every year through dividend issues and open-market stock repurchases. In each quarter this year, the company earned $0.25 per share. In each of the first three quarters, the company paid a regular cash dividend of $0.05 per share. The company has 2 million shares of common stock outstanding. What combination of dividends and stock repurchases could the company's board approve to meet their target payout percentage?

• A) A regular cash dividend of $0.05
• B) A regular cash dividend of $0.05 per share and an open-market stock repurchase of $100,000 in stock
• C) A regular cash dividend of $0.05 per share and an open-market stock repurchase of $400,000 in stock
• D) A regular cash dividend of $0.05 per share and an open-market stock repurchase of 500,000 in stock

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Definitions:

Developments

The process of growth, progress, or evolution, often referring to economic, social, or infrastructure improvements.

Uncontrollably

Uncontrollably describes an action or reaction that cannot be controlled or restrained.

Bedtime

Bedtime refers to the time at which a person usually goes to sleep. It is often a part of a daily routine aimed at ensuring sufficient rest.

Centration

A characteristic of preoperational thought in which a young child focuses (centers) on one idea, excluding all others.