Which of the following statements is correct?
A. An open-market dividend reinvestment plan will be most attractive to companies that need new equity and would otherwise have to issue additional shares of common stock through investment bankers.
B. Stock repurchases tend to reduce financial leverage.
C. If a company declares a 2-for-1 stock split, its stock price should roughly double.
D. One advantage of adopting the residual dividend policy is that this makes it easier for corporations to meet the requirements of Modigliani and Miller's dividend clientele theory.
E. If a firm repurchases some of its stock in the open market, then shareholders who sell their stock for more than they paid for it will be subject to capital gains taxes.
Answer: E
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a. True b. False Indicate whether the statement is true or false
Andre, Beau, and Caroline share profits and losses of their partnership in a 3:3:7 ratio respectively. If the net income is $900,000, calculate Caroline's share of the profits. (Do not round any intermediate calculations.)
A) $207,692 B) $484,615 C) $161,538 D) $69,231
Held-to-maturity securities that will mature within one year are classified as short-term investments and valued on the balance sheet at fair value
Indicate whether the statement is true or false
Overhead costs ________ as the number of units produced increases
A) decrease B) increase steadily C) fluctuate D) remain the same E) increase rapidly