Which of the Following Statements Is Correct

question 38

Multiple Choice

Which of the following statements is correct?

• A) The clientele effect can explain why so many firms change their dividend policies so often.
• B) 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.
• C) 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.
• D) Investors who receive stock dividends must pay taxes on the value of the new shares in the year the stock dividends are received.
• E) 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.

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Definitions:

Ciliated CNS Neuroglia

Specialized cells in the central nervous system with hair-like structures, involved in moving fluid or debris across their surfaces.

Cerebrospinal Fluid

Clear, colorless body fluid found in the brain and spinal cord, providing cushioning and maintaining a stable environment.

Ependymal Cells

Glial cells that line the ventricles in the brain and the central canal of the spinal cord, involved in the production of cerebrospinal fluid.

Reaction Time

The duration it takes for an individual to respond to a stimulus.