Which of the Following Statements Is CORRECT

question 51

Multiple Choice

Which of the following statements is CORRECT?

• A)If a firm follows the residual dividend policy, then a sudden increase in the number of profitable projects is likely to reduce the firm's dividend payout.
• B)The clientele effect can explain why so many firms change their dividend policies so often.
• C)One advantage of adopting the residual dividend policy is that this policy makes it easier for corporations to develop a specific and well-identified dividend clientele.
• D)New-stock dividend reinvestment plans are similar to stock dividends because they both increase the number of shares outstanding but don't change the firm's total amount of book equity.
• E)Investors who receive stock dividends must pay taxes on the value of the new shares in the year the stock dividends are received.

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Definitions:

Numbness of Extremities

A lack of sensation or feeling in the limbs, such as the hands or feet, often indicative of nerve damage or circulation issues.

Fainting

A sudden, temporary loss of consciousness, often due to a decrease in blood flow to the brain.

Limited Function

Refers to a condition or situation where the capabilities or actions of a system, organ, or individual are restricted.

Fetus Size

A measurement that refers to the dimensions or growth development of a fetus during pregnancy, typically assessed via ultrasound.