Which of the Following Is NOT Correct in Comparing a Share

question 69

Multiple Choice

Which of the following is NOT correct in comparing a share repurchase to a cash dividend in a world with no taxes, transaction costs, or other market imperfections?

• A) The price of the firm's stock will be the same after the share repurchase or the cash dividend.
• B) The firm's EPS will be higher after the repurchase than it will be after the dividend.
• C) The firm's price/earnings ratio will be the same after the share repurchase or the cash dividend.
• D) The firm will have fewer shares of stock outstanding after the repurchase than it will after the dividend.
• E) The total wealth of an individual shareholder will not be affected by the share repurchase or the cash dividend.

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Definitions:

People-Oriented

An approach or management style focused on valuing and prioritizing the well-being, development, and engagement of individuals within an organization.

Participative Leadership

A leadership style where the leader includes team members in the decision-making process, valuing their input and fostering collaboration.

Leadership Competencies

Leadership competencies are a set of skills, knowledge, behaviors, and attitudes that are necessary for effective leadership in various organizational contexts.

Need for Achievement

A psychological drive that motivates individuals to strive for success, mastery, or high standards in their endeavors.