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:

Artificial Intelligence

The simulation of human intelligence in machines that are programmed to think and learn like humans.

Organic Farming

A method of farming that avoids the use of synthetic pesticides and fertilizers, emphasizing natural processes and biodiversity.

Audience Type

Categories of people targeted by a message, based on characteristics like age, background, or interests.

Attention Span

The length of time a person can concentrate on a task without becoming distracted, which varies based on factors like age, interest, and environmental conditions.