Which of the Following Is Generally NOT TRUE of Stock

question 28

Multiple Choice

Which of the following is generally NOT TRUE of stock repurchase plans?

• A)Stock repurchase plans effectively allow shareholders to choose their own dividend policy.
• B)Stockholders who sell all or part of their shares back to the firm as part of an announced stock repurchase plan pay taxes at an ordinary rate rather than the capital gains rate because the IRS recognizes these plans as thinly veiled attempts to reduce stockholder tax liabilities.
• C)About 30% of announced stock repurchase plans are fully completed.
• D)About 35% of announced stock repurchase plans are never started.

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Definitions:

Fitness for a Particular Purpose

An implied warranty that goods will meet the specific needs of the buyer, as known by the seller at the time of purchase.

Merchant

A person or company involved in wholesale trade, especially one dealing with foreign countries or supplying merchandise to a particular trade.

Implied Warranty

An implied warranty is a legal assumption in sales that the goods sold meet certain quality and reliability standards, even if not expressly stated.

Express Warranty

A clearly stated promise or guarantee made by a seller that a product will meet certain standards of quality and reliability.