Which of the Following Statements Is Correct

question 73

Multiple Choice

Which of the following statements is correct?

• A) Investors rightly prefer repurchases because the reduced number of shares increases earnings per share.
• B) Companies with large repurchase programs usually finance them by a cut in dividends.
• C) Companies pay out as dividends whatever is left over after making needed capital investments.
• D) A stock repurchase does not increase stock price but it does avoid the fall in price that would occur on the ex-dividend date.

---

Definitions:

Conclusions

The judgments or decisions reached after careful consideration of facts and observations.

Intuition

The ability to understand or know something immediately, based on a gut feeling rather than conscious reasoning.

Cross-cultural Communication

The practice of recognizing and understanding the differences and similarities across cultures to communicate effectively in a global context.

Economic Values

The principles or standards guiding the allocation, distribution, and consumption of resources within a society or economy.