Which of the Following Statements Is False

question 42

Multiple Choice

Which of the following statements is false?

• A) With a stock dividend, a firm does not pay out any cash to shareholders. As a result, the total market value of the firm's assets and liabilities, and therefore of its equity, is unchanged.
• B) If the price of the stock falls too low, a company can engage in a reverse split and reduce the number of shares outstanding.
• C) Stock dividends of 50% or higher are generally referred to as stock splits.
• D) Rather than pay a dividend using cash or shares of its own stock, a firm can also distribute shares of a subsidiary in a transaction referred to as an off-shoot.

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Definitions:

Consumption

Utilization of products and services by household members.

Present Value

The contemporary estimate of a future monetary sum or cash flows, evaluated with a given return rate.

Investment Projects

Initiatives or plans undertaken by individuals or organizations to allocate resources with the expectation of generating future profits.

Budget Set

The collection of all possible bundles of goods and services that a consumer can afford given their income and the prices of goods.