Which of the Following Statements Is NOT Correct

question 7

Multiple Choice

Which of the following statements is NOT correct?

• A) after a 3-for-1 stock split, a company's price per share should fall, but the number of shares outstanding will rise.
• B) investors can interpret a stock repurchase program as a signal that the firm's managers believe the stock is undervalued.
• C) companies can repurchase shares to distribute large inflows of cash, say from the sale of a division, to stockholders without paying cash dividends.
• D) stockholders pay no income tax on dividends if the dividends are used to purchase stock through a dividend reinvestment plan.
• E) stock repurchases can be used by a firm as part of a plan to change its capital structure.

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Definitions:

Korotkoff Sounds

The sounds a doctor listens for when taking blood pressure with a stethoscope and sphygmomanometer, marking the systolic and diastolic pressures.

Systolic Pressure

The blood pressure measured when the left ventricle of the heart contracts.

Diastolic Pressure

The lower number in a blood pressure reading, representing the pressure in the arteries when the heart rests between beats.

Dyspnea

Difficulty in breathing or shortness of breath, often indicative of a medical condition.