Which of the Following Actions Will Best Enable a Company

question 25

Multiple Choice

Which of the following actions will best enable a company to raise additional equity capital?

• A) Declare a stock split.
• B) Begin an open-market purchase dividend reinvestment plan.
• C) Initiate a stock repurchase program.
• D) Begin a new-stock dividend reinvestment plan.
• E) Refund long-term debt with lower cost short-term debt.

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Definitions:

Investee

The entity in which an investor holds an interest, often evidenced through ownership of securities or equity.

Voting Common Stock

A class of stock that grants the holder the right to vote on corporate matters at shareholders' meetings.

Goodwill

An invisible asset that emerges when purchasing a business for a price that is above the fair valuation of its net identifiable assets.

Net Loss

A financial situation where a company's total expenses exceed its total revenues, resulting in a negative profit.