Which of the Following Statements Is False

question 62

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 a off-shoot.

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Definitions:

Great Depression

A severe worldwide economic crisis that took place during the 1930s, marked by massive unemployment and widespread poverty.

Matching Grant

A funding arrangement where a grant is given on the condition that an equal amount is matched from another source.

Nullification Theory

A legal theory suggesting that U.S. states have the right to nullify, or invalidate, any federal law which they deem unconstitutional.

Dual Federalism

A political arrangement in which power is divided between federal and state governments in clearly defined terms, with state governments exercising those powers accorded to them without interference from the federal government.