Which of the Following Statements Is NOT True

question 10

Multiple Choice

Which of the following statements is NOT true?

• A)Stock repurchases can be used by a firm as part of a plan to change its capital structure.
• B)After a 3-for-1 stock split, a company's price per share should fall, but the number of shares outstanding will rise.
• C)Investors can interpret a stock repurchase program as a signal that the firm's managers believe the stock is undervalued.
• D)Stockholders pay no income tax on dividends if the dividends are used to purchase stock through a dividend reinvestment plan.

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Definitions:

Crown Property

Assets owned by the monarch or government of a realm, particularly in commonwealth countries, often including lands, buildings, and heritage assets.

Statement Of Financial Position

A financial statement that shows the assets, liabilities, and equity of a company at a specific point in time, providing a snapshot of its financial condition.

Fair Market Value

The price that an asset would sell for on the open market, under current market conditions, between willing and knowledgeable parties.

Accumulated Deficit

Accumulated deficit is a negative balance in retained earnings, indicating that a company's losses have exceeded its profits over time.