1. The "signaling effect" relates primarily to
A. directives given to the firm's managers by the board of directors.
B. the information provided by the firm to market participants.
C. the messages received by the firm from its shareholders.
D. the ratio of expected income investors to growth investors.
2. Maxwell Electronics earned $13 million last year and maintains a 30% dividend payout ratio. The company has 2 million shares of common stock outstanding and a P/E ratio of 12. What is the dividend yield for Maxwell Electronics?
A. 1.50%
B. 2.50%
C. 3.50%
D. 4.50%
3. The "clientele effect" is primarily concerned with
A. investor behavior and attitudes toward dividends.
B. relationships between stockbrokers and clients.
C. the company's trade credit policies.
D. promoting the highest possible quality for customers.
4. Maxwell Electronics earned $13 million last year and maintains a 30% dividend payout ratio. The company has 2 million shares of common stock outstanding and a P/E ratio of 12. What amount of earnings per share did Maxwell Electronics generate?
A. $4.40
B. $5.30
C. $6.50
D. $7.80