Which of the Following Statements Is Correct

question 38

Multiple Choice

Which of the following statements is correct?

• A) The clientele effect can explain why so many firms change their dividend policies so often.
• B) One advantage of adopting the residual dividend policy is that this policy makes it easier for corporations to develop a specific and well-identified dividend clientele.
• C) New-stock dividend reinvestment plans are similar to stock dividends because they both increase the number of shares outstanding but don't change the firm's total amount of book equity.
• D) Investors who receive stock dividends must pay taxes on the value of the new shares in the year the stock dividends are received.
• E) If a firm follows the residual dividend policy, then a sudden increase in the number of profitable projects is likely to reduce the firm's dividend payout.

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Definitions:

Supplemental Oxygen

Additional oxygen provided to individuals to ensure adequate oxygen levels in the blood, commonly used in medical treatments.

Risk For Injury

An increased likelihood of experiencing physical harm or damage.

Ineffective Health Maintenance

The inability to identify, manage, and/or seek out help to maintain health.

American Association

This term is too generic without further context but usually refers to an organization in America focused on a specific interest or professional field.