Which of the Following Statements Is CORRECT

question 14

Multiple Choice

Which of the following statements is CORRECT?

• A) If a firm repurchases some of its stock in the open market, then shareholders who sell their stock for more than they paid for it will be subject to capital gains taxes.
• B) An open-market dividend reinvestment plan will be most attractive to companies that need new equity and would otherwise have to issue additional shares of common stock through investment bankers.
• C) Stock repurchases tend to reduce financial leverage.
• D) If a company declares a 2-for-1 stock split, its stock price should roughly double.
• E) One advantage of adopting the residual dividend policy is that this makes it easier for corporations to meet the requirements of Modigliani and Miller's dividend clientele theory.

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Definitions:

Contingency Management Training

A behavioral therapy technique that modifies behavior by altering the consequences, specifically rewards and punishments, associated with actions.

Aversion Therapy

A form of psychological treatment where unpleasant stimuli are associated with undesirable behaviors to discourage those behaviors.

Internet Use Disorder

A proposed disorder marked by excessive and problematic use of the internet, leading to significant impairment or distress in daily life.

DSM-5

As the ultimate reference for diagnosing mental disorders, the Fifth Edition of the Diagnostic and Statistical Manual of Mental Disorders is utilized by medical experts.