Which of the Following Statements Is CORRECT

question 28

Multiple Choice

Which of the following statements is CORRECT?

• A) If a firm follows the residual dividend model,then a sudden increase in the number of profitable projects would be likely to lead to a reduction of the firm's dividend payout ratio.
• B) The clientele effect explains why so many firms change their dividend policies so often.
• C) One advantage of adopting the residual dividend model is that this policy makes it easier for a corporation to attract a specific and well-identified dividend clientele.
• D) 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.
• E) Investors who receive stock dividends must pay taxes on the value of the new shares in the year the stock dividends are received.

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Definitions:

Feeding Tubes

Tubes used for supplying nutrition directly into a person’s stomach or intestine, often used when oral feeding is not possible.

Assisted Suicide

The act of helping another person to bring about their own death, at their request, to relieve them from suffering from an incurable and painful disease or condition.

Ethical

Pertaining to morality or the principles of right and wrong behavior and the goodness or badness of human character.

Recommendation

A suggestion or advice given based on analysis or experience, aimed at guiding decisions or actions.