Chap+17+Slns+_7th+ed_+-+Oct+20+2010+_GE_.docVIP

CHAPTER17 DIVIDENDS AND DIVIDEND POLICY Learning Objectives LO1 Dividend types and how dividends are paid. LO2 The issues surrounding dividend policy decisions. LO3 The difference between cash and stock dividends. LO4 Why share repurchases are an alternative to dividends. Answers to Concepts Review and Critical Thinking Questions 1. (LO2) Dividend policy deals with the timing of dividend payments, not the amounts ultimately paid. Dividend policy is irrelevant when the timing of dividend payments doesn’t affect the present value of all future dividends. 2. (LO4) A stock repurchase reduces