Which of the Following Statements Is NOT Correct

question 3

Multiple Choice

Which of the following statements is NOT correct?

• A) After a 3-for-1 stock split, a company's price per share should fall, but the number of shares outstanding will rise.
• B) Investors can interpret a stock repurchase program as a signal that the firm's managers believe the stock is undervalued.
• C) Companies can repurchase shares to distribute large inflows of cash, say from the sale of a division, to stockholders without paying cash dividends.
• D) Stockholders pay no income tax on dividends if the dividends are used to purchase stock through a dividend reinvestment plan.
• E) Stock repurchases can be used by a firm as part of a plan to change its capital structure.

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Definitions:

Preprogrammed Learning Skills

Abilities or knowledge that are innately structured in an individual, potentially requiring activation or further development through experience.

Self-locomotion

The ability of an individual to move independently using physical capabilities, such as walking or crawling.

Intellectual Parents

Figures credited with the creation, development, and nurturing of ideas, theories, or intellectual movements.

Nurturing Environment

An environment that supports and promotes emotional, physical, and intellectual development.