Which of the Following Statements About the Relative Advantages of Share

question 36

Multiple Choice

Which of the following statements about the relative advantages of share buy-backs over dividends is NOT true?

• A) Share buy-backs send a stronger signal than dividends to the market about management's belief that the company's prospects are good.
• B) On-market share purchases allow management more flexibility because investors are less likely to react if the management cuts back or ends a share buy-back as compared to cutting back on dividend payments.
• C) Share buy-backs allow shareholders to choose whether or not to participate in the share buy-back. This allows shareholders to have more control over their tax burden.
• D) Historically, tax on dividend payment have been higher than those on share buy-backs.

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Definitions:

Parietal Lobe

One of the four major lobes of the brain, located at the upper back area in the skull, which processes sensory information such as touch, temperature, and pain.

Emotional Experience

The personal feelings or emotions one undergoes in response to external stimuli or internal thoughts.

Sensory Experience

The subjective experience that results from the processing of sensory input (e.g., sight, sound, touch, taste, and smell) by the nervous system.

Lack of Control

A situation or feeling where an individual perceives they have no power or influence over events or outcomes in their life.