Which of the Following Statements Is Correct

question 37

Multiple Choice

Which of the following statements is correct?

• A) Capital gains earned in a share repurchase are taxed less favorably than dividends; this explains why companies typically pay dividends and avoid share repurchases.
• B) Very often, a company's stock price will rise when it announces that it plans to commence a share repurchase program because a repurchase announcement usually is seen as a positive signal from management.
• C) Stock repurchases increase the number of outstanding shares.
• D) The clientele effect is the best explanation for why companies tend to vary their dividend payments from quarter to quarter.
• E) If a company has a 2-for-1 stock split, its stock price should roughly double.

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Definitions:

Correct Punctuation

The accurate use of symbols in writing that clarifies meaning and separates structural or logical elements of text.

Incorrect Citation

The inaccurate or erroneous referencing of sources in academic or professional writing, which can undermine the credibility of the work.

Logic Problem

A puzzle or challenge that requires the use of reasoning and critical thinking skills to solve.

Idea Incomplete

A concept or thought that has not been fully developed or lacks necessary details.