Which of the Following Statements Is Correct

question 38

Multiple Choice

Which of the following statements is correct?

• A) The clientele effect can explain why so many firms change their dividend policies so often.
• B) One advantage of adopting the residual dividend policy is that this policy makes it easier for corporations to develop a specific and well-identified dividend clientele.
• C) New-stock dividend reinvestment plans are similar to stock dividends because they both increase the number of shares outstanding but don't change the firm's total amount of book equity.
• D) Investors who receive stock dividends must pay taxes on the value of the new shares in the year the stock dividends are received.
• E) If a firm follows the residual dividend policy, then a sudden increase in the number of profitable projects is likely to reduce the firm's dividend payout.

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Definitions:

Quality Circles

Small groups of employees who regularly meet to discuss and propose solutions to workplace issues, aiming to improve the organization's performance and work environment.

Institutional Support

The assistance and resources provided by institutions, such as financial, material, or ideological support, to facilitate the achievement of objectives.

Proper Training

The process of teaching or learning the necessary skills and knowledge to perform a task effectively and efficiently.

Team-Building Activities

Designed tasks or exercises aimed at enhancing interpersonal relations and team performance.