Which of the Following Statements Is CORRECT

question 43

Multiple Choice

Which of the following statements is CORRECT?

• A) Under the tax laws as they existed in 2017,a dollar received by an individual taxpayer as interest income is taxed at the same rate as a dollar received as dividends.
• B) One nice feature of dividend reinvestment plans (DRIPs)is that they reduce the taxes investors would have to pay if they received cash dividends.
• C) Empirical research indicates that,in general,companies send a negative signal to the marketplace when they announce an increase in the dividend.As a result,share prices fall when dividend increases are announced because investors interpret the increase as a signal that the firm expects fewer good investment opportunities in the future.
• D) If a company needs to raise new equity capital,a new-stock dividend reinvestment plan would make sense.However,if the firm does not need new equity,then an open market purchase dividend reinvestment plan would probably make more sense.
• E) Dividend reinvestment plans have not caught on in most industries,and today over 99% of all DRIPs are offered by utilities.

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Definitions:

Proteins

Large, complex molecules made up of amino acids that perform a variety of functions in the body, including catalysis, structure, and transport.

Citric Acid Cycle

A series of chemical reactions used by all aerobic organisms to generate energy through the oxidation of acetate into carbon dioxide.

Electron Transport Chain

A series of protein complexes that transfer electrons from electron donors to electron acceptors via redox reactions, coupled with the transfer of protons across a membrane to generate ATP.

NADH

NADH denotes Nicotinamide Adenine Dinucleotide (reduced form), a coenzyme that plays a critical role in the production of energy through the process of cellular respiration.