Which of the Following Is Generally NOT TRUE of Stock

question 28

Multiple Choice

Which of the following is generally NOT TRUE of stock repurchase plans?

• A)Stock repurchase plans effectively allow shareholders to choose their own dividend policy.
• B)Stockholders who sell all or part of their shares back to the firm as part of an announced stock repurchase plan pay taxes at an ordinary rate rather than the capital gains rate because the IRS recognizes these plans as thinly veiled attempts to reduce stockholder tax liabilities.
• C)About 30% of announced stock repurchase plans are fully completed.
• D)About 35% of announced stock repurchase plans are never started.

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Definitions:

Tax Revenue

The income generated from taxes imposed by a government on individuals and entities, used to fund public services and government obligations.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded, typically downward-sloping.

Product Prices

The prices of goods and services offered in the market, influenced by various factors including production costs, competition, and demand.

Demand Increase

A rise in the quantity of a product or service that consumers are willing and able to buy, typically due to factors like lower prices, increased income, or changes in preferences.