Which of the Following Statements Is NOT CORRECT

question 36

Multiple Choice

Which of the following statements is NOT CORRECT?

• 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 may interpret a stock repurchase program as a signal that the firm's managers believe the stock is undervalued,or,alternatively,as a signal that the firm does not have many good investment opportunities.
• D) A company can repurchase stock to distribute a large one-time cash inflow,say from the sale of a division,to stockholders without having to increase its regular dividend.
• E) 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:

Self-discrepancy Theory

A psychological model that explains how the mismatch between an individual's actual self, ideal self, and ought self can lead to emotional discomfort.

Chemical Engineer

A professional who applies principles of chemistry, physics, and engineering to design and implement processes for producing, transforming, and transporting materials.

Small Discrepancy

a minor difference or deviation from what is expected, generally not sufficient to cause concern.

Auto-motive Theory

The theory suggesting that motivations can be automatically triggered by environmental cues without conscious intention.