Which of the Following Statements Is CORRECT

question 12

Multiple Choice

Which of the following statements is CORRECT?

• A) One disadvantage of dividend reinvestment plans is that they increase transactions costs for investors who want to increase their investment 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) Stock repurchases make sense if a company expects to have a lot of profitable new projects to fund over the next few years,provided investors are aware of these investment opportunities.
• E) One advantage of an open market dividend reinvestment plan is that it provides new equity capital and increases the shares outstanding.

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Definitions:

Learning

The acquisition of knowledge or skills through study, experience, or being taught.

Initial Conceptualization

The early stage of forming an idea or concept, laying the groundwork for its development and implementation.

Business Model Canvas

A strategic management template for developing new or documenting existing business models, visually outlining a company's value proposition, infrastructure, customers, and finances.

Feasibility Study

An assessment of the practicality and potential success of a proposed project, including analysis of economic, technical, legal, and scheduling factors.