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.

---

Definitions:

Stage 2 Sleep

A phase of sleep that is part of the non-REM sleep cycle, characterized by specific brain wave patterns including sleep spindles and K-complexes.

Human Sleep Cycle

The progression through various stages of non-REM and REM sleep that repeats cyclically over a night's sleep.

Deep Sleep

A stage of sleep characterized by slow brain waves, associated with physical and mental restoration.

60-Year-Olds

Individuals who have reached the age of sixty, often entering a phase of life characterized by both challenges and opportunities for growth.