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:

Nonpersonal Presentation

Presentation methods where information about products or services is conveyed to potential customers through indirect means, such as advertisements or digital media, without direct interpersonal communication.

Price Reductions

A strategic decrease in the selling price of products or services, typically to drive sales volume, clear inventory, or respond to competitive market pressures.

Rebates

A partial refund to someone who has paid too much for tax, rent, or a utility, or as a promotional incentive offered by manufacturers or retailers after purchase.

Samples

Small quantities or instances of a product or material used for testing, evaluation, or demonstration purposes to gauge its characteristics or the population’s response.