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Flashcards in Final Ch18 Deck (9)
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dividends: legal rules

most states forbid payment of dividends that might impair the initial capital contributions to the firm


dividends: access to capital markets

A medium-to-large size company that is willing to pay dividends will relatively have easy access to financial markets


dividends: desire for control

small firms: may hold back dividends
larger firms: stockholders may demand removal of management if dividends are withheld


holder of record date

date on which the firm examines its books to determine who is entitled to cash dividends


ex-dividend date

2 business dates before the holder of record date


dividend payment date

date when checks will be sent to the entitles stockholders


stock dividend

A dividend payment made in the form of additional shares, rather than a cash payout.


stock splits

company divides its existing shares into multiple shares


reverse stock splits

when a firm exchanges fewer shares for existing shares with the intent of increasing the stock price