Which of the Following Statements Is Correct

question 70

Multiple Choice

Which of the following statements is correct?

• A)One disadvantage of dividend reinvestment plans is that they increase transaction costs for investors who want to increase their ownership in the company.
• B)One advantage of dividend reinvestment plans is that they enable investors to postpone paying taxes on the dividends credited to their account.
• C)Stock repurchases can be used by a firm that wants to increase its debt ratio.
• D)One advantage of an open market dividend reinvestment plan is that it provides new equity capital and increases the shares outstanding.

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