Which of the Following Statements Is CORRECT

question 45

Multiple Choice

Which of the following statements is CORRECT?

• A) If a firm repurchases some of its stock in the open market,then shareholders who sell their stock for more than they paid for it will be subject to capital gains taxes.
• B) An open-market dividend reinvestment plan will be most attractive to companies that need new equity and would otherwise have to issue additional shares of common stock through investment bankers.
• C) Stock repurchases tend to reduce financial leverage.
• D) If a company declares a 2-for-1 stock split,its stock price should roughly double.
• E) One advantage of adopting the residual dividend model is that this makes it easier for corporations to meet the requirements of Modigliani and Miller's dividend clientele theory.

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Definitions:

Strength Training

A form of physical exercise specializing in the use of resistance to induce muscular contraction, which builds the strength, anaerobic endurance, and size of skeletal muscles.

Aerobic

Pertains to processes or activities that require the presence of oxygen, often related to exercise that improves cardiovascular health.

Low-Impact

Refers to activities or actions that cause minimal stress or damage to the body or environment.

Resistance

The refusal to accept or comply with something; the attempt to prevent something by action or argument.