Which of the Following Statements Is Correct

question 19

Multiple Choice

Which of the following statements is correct?

• A)If a company has a 2-for-1 stock split, its stock price should roughly double.
• B)Capital gains earned in a share repurchase are taxed less favourably than dividends; this explains why companies typically pay dividends and avoid share repurchases.
• C)Very often, a company's stock price will rise when it announces that it plans to commence a share repurchase program. Such an announcement could lead to a stock price decline, but this does not normally happen.
• D)The clientele effect is the best explanation for why companies tend to vary their dividend payments from quarter to quarter.

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Definitions:

Projecting Confidence

The act of displaying assurance and self-assuredness in one's capabilities and presence through body language, speech, and behavior.

Common Reactions

General or typical responses or behaviors in specific situations or under stress.

Victimization

The process or state of being subjected to harm, oppression, or mistreatment by another individual or group.

Depression

A mental health disorder characterized by persistent feelings of sadness, hopelessness, and a lack of interest or pleasure in activities.