Which of the Following Statements Is Correct

question 56

Multiple Choice

Which of the following statements is correct?

• A) an open-market dividend reinvestment plan will be most attractive to companies that need new equity and would otherwise have to issue additional shares of common stock through investment bankers.
• B) stock repurchases tend to reduce financial leverage.
• C) if a company declares a 2-for-1 stock split, its stock price should roughly double.
• D) one advantage of adopting the residual dividend policy is that this makes it easier for corporations to meet the requirements of modigliani and miller's dividend clientele theory.
• E) if a firm repurchases some of its stock in the open market, then shareholders who sell their stock for more than they paid for it will be subject to capital gains taxes.

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Definitions:

Tariffs

Taxes imposed by a government on imported or exported goods to regulate trade balances or protect domestic industries.

Currency Shifts

Fluctuations in the value of one currency relative to others, which can affect economic conditions and financial decisions.

Cultural Barriers

Obstacles related to differences in culture, language, and norms that can hinder effective communication and interaction among individuals from different backgrounds.

Religious Attitudes

Refers to the beliefs, feelings, and behaviors towards spirituality or religion held by an individual or a group.