The dividends of tracking stock are tied to a particular division, rather than the company as...

The dividends of tracking stock are tied to a particular division, rather than the company as a whole. Tracking stock usually has no voting rights, and the financial disclosure for the division is not as regulated as for the company.

True / False

Solutions

Expert Solution

True

tracking stock is not like common stock, it is sealed in a separate security market, company performance is not connected with this tracking stock, it may go up even if the company performs not well or vise versa, during the liquidation of the company the tracking stock do not a legal authority to claim to the company, the return is based on the business unit or division and it is not mandatory to pay dividends.

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

Most corporations pay quarterly dividends on their common stock rather than annual dividends. Barring any unusual...

Most corporations pay quarterly dividends on their common stock rather than annual dividends. Barring any unusual circumstances during the year, the board raises, lowers, or maintains the current dividend once a year and then pays this dividend out in equal quarterly installments to its shareholders. a. Suppose a company currently pays an annual dividend of $3.40 on its common stock in a single annual installment, and management plans on raising this dividend by 3.8 percent per year indefinitely. If the...

Most corporations pay quarterly dividends on their common stock rather than annual dividends. Barring any unusual...

Most corporations pay quarterly dividends on their common stock rather than annual dividends. Barring any unusual circumstances during the year, the board raises, lowers, or maintains the current dividend once a year and then pays this dividend out in equal quarterly installments to its shareholders. a. Suppose a company currently pays an annual dividend of $3.80 on its common stock in a single annual installment, and management plans on raising this dividend by 7 percent per year indefinitely. If the...

Most corporations pay quarterly dividends on their common stock rather than annual dividends. Barring any unusual...

Most corporations pay quarterly dividends on their common stock rather than annual dividends. Barring any unusual circumstances during the year, the board raises, lowers, or maintains the current dividend once a year and then pays this dividend out in equal quarterly installments to its shareholders. a. Suppose a company currently pays an annual dividend of $5.00 on its common stock in a single annual installment, and management plans on raising this dividend by 6.25 percent per year indefinitely. If the...

11) The type of advertising that enhances a company`s image rather than promotes a particular product...

11) The type of advertising that enhances a company`s image rather than promotes a particular product is called ____. a. Institutional advertising b. Product advertising c. Earned advertising d. Owned advertising 12) The type of advertising that can be used in all of the product life cycle is called ____. a. Institutional advertising b. Product advertising c. Earned advertising d. Owned advertising 13) The last step in advertising campaign is ____. a. Define advertising objectives b. Make creative decisions c....

Corporations can execute stock transactions other than cash dividends, such as stock dividends and stock splits....

Corporations can execute stock transactions other than cash dividends, such as stock dividends and stock splits. First, briefly explain these two transactions in your own words. Second, offer an explanation as to why a corporation would want to issue a stock dividend or stock split? Third, search the internet and list a corporation you recognize that has issued either a stock dividend or a stock split in the past couple of years.

Considering the differences other than personal income taxes, what companies should pay dividends rather than repurchase...

Considering the differences other than personal income taxes, what companies should pay dividends rather than repurchase shares? How important is the right choice between the two?

From an investor's viewpoint, are dividends expected to be paid on preferred stock riskier than dividends...

From an investor's viewpoint, are dividends expected to be paid on preferred stock riskier than dividends expected to be paid on common stock, all other things equal?

The decision to issue debt rather than additional shares of stock is an example of; a....

The decision to issue debt rather than additional shares of stock is an example of; a. working capital management b. a net working capital decision c capital budgeting d. a controller’s duties e. the capital structure decision

Which of the following is not an advantage of a company using equity rather than debt...

Which of the following is not an advantage of a company using equity rather than debt to finance a project? A. Interest always takes more cash than does paying dividends. B. Dividends do not need to be paid. C. Equity does not need to be repaid whereas debt does. D. Interest and Dividends are tax deductible. A note of caution in interpreting the debt ratio is that A. all debt decreases liquidity ratios. B. financing arrangements, such as leases, may...

What are the complications in calculating profit if you finance investment by shorting stock rather than borrowing?

The profit calculation assumes that you borrow at a fixed interest rate to finance investments. An alternative way to borrow is to short-sell stock. What complications would arise in calculating profit if you financed a $1000 S&R index investment by shorting stock, rather than by borrowing $1000?

Subjects