Which of the Following Statements Is CORRECT

question 26

Multiple Choice

Which of the following statements is CORRECT?

• A) If a company has a 2-for-1 stock split,its stock price should roughly double.
• B) Capital gains earned on shares repurchased are taxed less favorably than dividends,which is why companies typically pay dividends and avoid share repurchases.
• C) Very often,a company's stock price will rise when it announces that it plans to commence a share repurchase program.Such an announcement could lead to a stock price decline,but this does not normally happen.
• D) Stock repurchases increase the number of outstanding shares.
• E) The clientele effect is the best explanation for why companies tend to vary their dividend payments from quarter to quarter.

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Definitions:

Uncertainty Avoidance

A cultural dimension that measures the extent to which societies are comfortable with ambiguity and the unknown, preferring structured situations.

Predeparture Training

Training provided to employees before they go on international assignments, focusing on cultural, language, and operational aspects of the host country.

Foreign Assignment

An organizational practice in which an employee is sent abroad to work at a different location or branch of the same company, aiming to gain global experience and insights.

Customers

Individuals or entities that purchase goods or services from a business, essential for the business's success.