Which of the Following Statements Is Correct

question 12

Multiple Choice

Which of the following statements is correct?

• A) Capital gains earned in a share repurchase are taxed less favorably than dividends; this explains why companies typically pay dividends and avoid share repurchases.
• B) Very often, a company's stock price will rise when it announces that it plans to commence a share repurchase program.Such an announcement could lead to a stock price decline, but this does not normally happen.
• C) Stock repurchases increase the number of outstanding shares.
• D) The clientele effect is the best explanation for why companies tend to vary their dividend payments from quarter to quarter.
• E) If a company has a 2-for-1 stock split, its stock price should roughly double.

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Definitions:

Primary Assessment

The initial evaluation conducted to determine the existence or severity of a problem, often used in medical or psychological contexts.

Free-Association

A psychoanalytic technique in which a patient says anything that comes to mind without censorship, used to explore the unconscious.

Rorschach Inkblot

A mental assessment where participants' interpretations of inkblots are noted and examined through psychological analysis or sophisticated algorithms.

Theory of Personality

An organized system of beliefs that attempts to explain human character and behavior, often focusing on individual differences and psychological structures.