Which of the Following Statements Is CORRECT

question 29

Multiple Choice

Which of the following statements is CORRECT?

• A) One advantage of dividend reinvestment plans is that they enable investors to avoid paying taxes on the dividends they receive.
• B) If a company has an established clientele of investors who prefer a high dividend payout, and if management wants to keep stockholders happy, it should not follow the strict residual dividend policy.
• C) If a firm follows a strict residual dividend policy, then, holding all else constant, its dividend payout ratio will tend to rise whenever the firm's investment opportunities improve.
• D) If Congress eliminates taxes on capital gains but leaves the personal tax rate on dividends unchanged, this would motivate companies to increase their dividend payout ratios.

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Definitions:

Major Organic Product

The main product formed in greater quantity compared to other products in an organic chemical reaction.

Step-by-step Mechanism

A detailed, sequential description of the stages involved in a chemical reaction, explaining how reactants transform into products.

Major Organic Product

The primary outcome of a chemical reaction, specifically indicating the most abundant product formed when organic compounds are involved.

Radical Chain Initiator

A substance that can produce free radicals under suitable conditions, initiating a chain reaction, especially in polymerization.