Which of the Following Statements Is Correct

question 9

Multiple Choice

Which of the following statements is correct?

• A) One nice feature of dividend reinvestment plans (DRIPs) is that they reduce the taxes investors would have to pay if they received cash dividends.
• B) Empirical research indicates that, in general, companies send a negative signal to the marketplace when they announce an increase in the dividend, and as a result share prices fall when dividend increases are announced.The reason is that investors interpret the increase as a signal that the firm has relatively few good investment opportunities.
• C) If a company wants to raise new equity capital rather steadily over time, a new stock dividend reinvestment plan would make sense.However, if the firm does not want or need new equity, then an open market purchase dividend reinvestment plan would probably make more sense.
• D) Dividend reinvestment plans have not caught on in most industries, and today about 99% of all companies with DRIPs are utilities.
• E) If a company offers a dividend reinvestment plan, almost all of its shareholders enroll in the plan.

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Definitions:

Choroid

A layer of the eye between the retina and the sclera, rich in blood vessels, that provides oxygen and nutrients to the outer parts of the retina.

Sclera

The white outer layer of the eyeball, providing protection and giving the eye its shape.

Bipolar Cells

Specialized neurons in the retina that play a crucial role in visual processing by connecting photoreceptors to ganglion cells.

Ganglion Cells

Type of neurons located in the retina that receive visual information from photoreceptors and transmit it to the brain.