Which of the following statements is correct?
A. If a company uses the residual dividend model to determine its dividend payments, dividends payout will tend to increase whenever its profitable investment opportunities increase.
B. The stronger management thinks the clientele effect is, the more likely the firm is to adopt a strict version of the residual dividend model.
C. Companies may pay too high a price in a large open market repurchase if it takes too long to complete.
D. An investor’s capital gains from selling stock in a repurchase are always taxed at a higher rate than if the distribution were dividends.
E. The tax code encourages companies to pay dividends rather than reinvest earnings.
Answer: C
You might also like to view...
Answer the following statements true (T) or false (F)
1. A disadvantage of group-aided decision making is that groups tend to suppress an individual's intellectual stimulation and creativity. 2. The tendency for group members to agree for the sake of unanimity and thus avoid accurately assessing the decision situation is called satisficing. 3. Where time is of the essence, in most cases an individual should make the decision rather than a group. 4. Smaller-sized groups make higher-quality decisions.
Section 404 requires that corporate management (including the CEO) certify their organization's internal controls on a quarterly and annual basis
Indicate whether the statement is true or false
In determining whether the offeree accepted the offer, the court looks for the offeree's present intent to contract.
Answer the following statement true (T) or false (F)
Answer the following statements true (T) or false (F)
1. If the bank reconciliation includes a bank service charge, a journal entry is required, which debits Bank Expense and credits Cash. 2. If the bank reconciliation includes a deposit in transit, a journal entry is required that includes a debit to cash. 3. Journal entries are required if the bank reconciliation includes outstanding checks. 4.Journal entries are required if the bank reconciliation includes a book error.