Stock Splits, Stock Dividends, and Reverse Stock Splits Are Often

question 159

Multiple Choice

Stock splits, stock dividends, and reverse stock splits are often pursued with the objective of _____________________.

• A) Decreasing the owners' equity of the firm.
• B) Making the firm's stock more desirable to the average investor.
• C) Benefiting shareholders since regular dividends are irrelevant.
• D) Avoiding the need to pay a regular cash dividend.
• E) Enhancing the cash flow of the firm.

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Definitions:

Variable Costs

Expenses that change in proportion to the level of goods or services produced, such as materials and labor costs.

Repeat Customers

Customers who return to a business to make subsequent purchases, showing loyalty and continued interest in a company's products or services.

Credit Scoring

A statistical analysis performed by lenders to assess the credit worthiness of credit applicants.

Credit Policy

A set of guidelines that a company follows to determine the credit terms for its customers, which can influence its accounts receivable and sales.