Which of the Following Statements Is NOT True

question 10

Multiple Choice

Which of the following statements is NOT true?

• 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 can interpret a stock repurchase program as a signal that the firm's managers believe the stock is undervalued.
• D)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:

Economic Choices

Decisions made by individuals, firms, or governments regarding the allocation of resources and the distribution of goods and services.

Pure Competition

A market structure characterized by many sellers offering identical products, where no single seller has any influence over market price or conditions.

Monopoly Market

A market structure characterized by a single seller dominating the entire market, with no close substitutes for the product or service offered.