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Flashcards in Final Ch18 Deck (9)
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1

dividends: legal rules

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

2

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

3

dividends: desire for control

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

4

holder of record date

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

5

ex-dividend date

2 business dates before the holder of record date

6

dividend payment date

date when checks will be sent to the entitles stockholders

7

stock dividend

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

8

stock splits

company divides its existing shares into multiple shares

9

reverse stock splits

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