Which of the Following Statements Is Correct

question 37

Multiple Choice

Which of the following statements is correct?

• A) Capital gains earned in a share repurchase are taxed less favorably than dividends; this explains why companies typically pay dividends and avoid share repurchases.
• B) Very often, a company's stock price will rise when it announces that it plans to commence a share repurchase program because a repurchase announcement usually is seen as a positive signal from management.
• C) Stock repurchases increase the number of outstanding shares.
• D) The clientele effect is the best explanation for why companies tend to vary their dividend payments from quarter to quarter.
• E) If a company has a 2-for-1 stock split, its stock price should roughly double.

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Definitions:

Nexplanon

A brand of contraceptive implant that releases etonogestrel, used to prevent pregnancy for up to three years by being placed under the skin of the upper arm.

Diaphragm

A barrier method of contraception that is placed inside the vagina to cover the cervix and prevent sperm from entering the uterus.

Oral Contraceptives

Pills taken orally to inhibit fertility, typically by preventing ovulation or by altering conditions in the uterus.

Vaginal Rings

Flexible, doughnut-shaped rings placed inside the vagina to deliver hormones for contraception or to address hormonal imbalances.