Which of the Following Statements About the Relative Advantages of Stock

question 63

Multiple Choice

Which of the following statements about the relative advantages of stock repurchases over dividends is NOT true?

• A) Since most ongoing stock repurchase programs are as visible as dividend programs, they can be used effectively to send a positive signal about a firm's prospects to investors.
• B) Open-market stock purchases allow management more flexibility because investors are less likely to react if the management cuts back or ends a stock repurchase as compared to cutting back on dividend payments.
• C) Stock repurchases allow stockholders to choose whether or not to participate in the stock repurchase. This allows stockholders to have more control over their tax burden.
• D) Historically, taxes on dividend payment have been higher than those on stock repurchases.

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Definitions:

Delta Waves

Slow brain waves associated with deep sleep and restorative processes in the brain.

Sleep Spindles

Brief bursts of brain activity visible in EEG recordings that occur during stage 2 of sleep, associated with memory consolidation and synaptic plasticity.

Sleep Spindles

Short bursts of brain activity occurring during stage 2 of sleep, thought to play a role in memory consolidation and learning.

Delta Waves

Slow brainwaves primarily associated with deep sleep and regenerative states of rest.