Free CTP Exam Braindumps (page: 20)

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During the 1970s, many companies instituted dividend reinvestment plans (DRIPS). There are many benefits of this plan. What is the one negative aspect?

  1. Reduces the expense of shareholder relations
  2. Leads to an increase in the number of small shareholders
  3. Does not allow automatic reinvestment of dividends
  4. Leads to a reduction in the number of small shareholders

Answer(s): B



Company A regularly modifies its capital structure by repurchasing stock. Which one of the following is a true statement?

  1. Investors may feel that management is manipulating the stock price.
  2. Stock repurchases are not an attractive alternative to dividend payments.
  3. Partial disclosure to the SEC is required for repurchases.
  4. Stock repurchases do not offer tax deferral advantages over dividends.

Answer(s): A



What is the PRIMARY issue that management needs to consider when determining capital structure?

  1. Maintaining control of ownership
  2. Complying to rating agency and lender restrictions
  3. Using common stock as a source of funds
  4. Determining the mix of debt versus equity

Answer(s): D



On which exchange is a company’s stock traded on the over-the-counter market?

  1. AMEX
  2. FINRA
  3. NASDAQ
  4. NYSE

Answer(s): C






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