Which of the Following Statements Is Correct

question 70

Multiple Choice

Which of the following statements is correct?

• A)One disadvantage of dividend reinvestment plans is that they increase transaction costs for investors who want to increase their ownership in the company.
• B)One advantage of dividend reinvestment plans is that they enable investors to postpone paying taxes on the dividends credited to their account.
• C)Stock repurchases can be used by a firm that wants to increase its debt ratio.
• D)One advantage of an open market dividend reinvestment plan is that it provides new equity capital and increases the shares outstanding.

---

Definitions:

University Professors

Scholars and academic experts who educate students in higher education institutions and conduct research.

Group Polarization

The tendency for a group to make decisions that are more extreme than the initial inclination of its members, after discussion.

Groupthink

A phenomenon where a group makes faulty decisions due to group pressures, leading to a decline in mental efficiency and moral judgment.

Minority Opinions

Opinions or viewpoints held by a smaller segment of a group, which differ from those held by the majority.