Kappa Corp Has Just Raised Its Dividend from $2

question 100

Multiple Choice

Kappa Corp has just raised its dividend from $2.50 to $5 per share.(It plans to reduce its repurchases by a similar amount.) Caterina Chekov,who owns 100 shares of Kappa does not need the extra cash.What can she do to offset the change in dividend policy?

• A) reinvest the extra dividend in Kappa stock.
• B) sell $250 of Kappa stock each year.
• C) borrow $250 and invest it in Kappa stock.
• D) Nothing. She should sell out and invest elsewhere.

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Definitions:

Traditional Nonprofit

An organization that operates primarily on donations, grants, and volunteer support to serve a social, charitable, cultural, or educational purpose without pursuing profits.

Johnson Amendment

A U.S. law that prohibits all 501(c)(3) non-profit organizations from endorsing or opposing political candidates.

Repealing

The action of revoking or withdrawing a law, tax, duty, or regulation.

Entrepreneurship

The process of designing, launching, and running a new business or enterprise, often characterized by innovation, risk-taking, and the pursuit of profit.