Which of the Following Statements Is NOT CORRECT

question 26

Multiple Choice

Which of the following statements is NOT CORRECT?

• A)Stock repurchases can be used by a firm as part of a plan to change its capital structure.
• B)After a 3-for-1 stock split, a company's price per share should fall, but the number of shares outstanding will rise.
• C)Investors can interpret a stock repurchase program as a signal that the firm's managers believe the stock is undervalued.
• D)Companies can repurchase shares to distribute large inflows of cash, say from the sale of a division, to stockholders without paying cash dividends.
• E)Stockholders pay no income tax on dividends if the dividends are used to purchase stock through a dividend reinvestment plan.

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Definitions:

Administrative Agencies

Government bodies responsible for implementing laws and regulations, often with a specific focus such as healthcare, education, or transportation.

Executive Branch

Refers to the part of government responsible for enforcing laws and policies, headed by the President in the United States.

Legislative Branch

The part of government that makes laws, often consisting of a bicameral (two-house) system, such as the U.S. Congress, made up of the Senate and the House of Representatives.

Administrative Agencies

Governmental bodies responsible for the oversight and administration of specific functions, such as regulation or enforcement.