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.


Answer: E

Business

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C) distributor
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