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:

Causal Relationships

Describes a connection between two events where one is the cause and the other is the effect.

Stereotypical Male

A generalized view or preconception of men that attributes specific characteristics, roles, or behaviors typically associated with masculinity but may not accurately reflect individual identities.

Dominant

A characteristic, value, or behavior that has the most significant influence or control in a specific context.

Androcentric Bias

A perspective or approach that prioritizes male experiences or viewpoints, often to the exclusion or minimization of female ones.