How Stock Repurchases Differ from Dividends: Using the Same Information

question 39

Multiple Choice

How stock repurchases differ from dividends: Using the same information from the preceding question, approximately how much will you receive by waiting until after the ex-dividend day and then selling the shares in the market?

• A) You will receive about $13,500 by selling after the ex-dividend day.
• B) You will receive about $14,775 by selling after the ex-dividend day.
• C) You will receive about $14,512 by selling after the ex-dividend day.
• D) You will receive about $15,000 by selling after the ex-dividend day.

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Definitions:

Shares

Financial instruments representing ownership in a corporation or asset, designed to split dividends equally among holders when profits are made.

Annual Dividend

The total dividend payment a shareholder receives from a company or investment fund in one year.

Total Dollar Return

The overall financial benefit received from an investment, considering both capital gains and income such as dividends or interest.

Shares

Units of ownership interest in a corporation or financial asset that provides for an equal distribution in any profits, if any are declared, in the form of dividends.