Which of the Following Statements Is NOT CORRECT

question 36

Multiple Choice

Which of the following statements is NOT CORRECT?

• A) Stock repurchases can be used by a firm as part of a plan to change its capital structure.
• B) After a 3-for-1 stock split,a company's price per share should fall,but the number of shares outstanding will rise.
• C) Investors may interpret a stock repurchase program as a signal that the firm's managers believe the stock is undervalued,or,alternatively,as a signal that the firm does not have many good investment opportunities.
• D) A company can repurchase stock to distribute a large one-time cash inflow,say from the sale of a division,to stockholders without having to increase its regular dividend.
• E) Stockholders pay no income tax on dividends if the dividends are used to purchase stock through a dividend reinvestment plan.

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Definitions:

Ability

The capacity of an individual to perform tasks or skills effectively.

Task Difficulty

Task difficulty refers to the level of challenge presented by a task, significantly influencing an individual's performance and the strategies they employ to achieve success.

Stable

Not likely to change or fail; firmly established.

Mastery-oriented

An approach or attitude focused on learning, understanding, and mastering skills or knowledge, rather than merely achieving good grades or ratings.