Which of the Following Statements Is Most Correct

question 13

Multiple Choice

Which of the following statements is most correct?

• A) In general, stock repurchases are taxed the same way as dividends.
• B) One nice feature of dividend reinvestment plans is that they enable investors to reduce the taxes paid on their dividends.
• C) On average, companies send a negative signal to the marketplace when they announce an increase in their dividend.
• D) If a company is interested in issuing new equity capital, a new stock dividend reinvestment plan probably makes more sense than an open market dividend reinvestment plan.
• E) Statements b and d are correct.

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Definitions:

Utopian

Relating to an imagined perfect society where everything is ideal, often used to describe unrealistic or idealized concepts for societal organization.

Self-Interest

Acting in a way that is most personally beneficial, often used in economics to describe behavior in markets.

Insurance Premiums

The amount paid periodically to an insurance company by policyholders for coverage and to keep the policy active.

Central Planning

An economic system where decisions about production, investment, and distribution are made by the government or a central authority.