Which of the following statements is FALSE?Video: 6.D. P26-33 (Other considerations)Group of answer choicesC) A stock dividend reduces the equity value like share repurchases.D) If the price of the stock falls too low, a company can engage in a reverse split and reduce the number of shares outstandingB) If a company declares a 10% stock dividend, each shareholder will receive one new share of stock for every 10 shares already owned.A) A typical motivation for a stock split is to keep the share price in a range thought to be attractive to small investors.

1. Question 2 One possible reason why a company splits its shares is that its share price is too high. Choose one of the following answers. True False

2. Which of the following statements is FALSE?Video: 6.B. P5-16 (Payout policy with perfect markets)Group of answer choicesD) In perfect capital markets, investors are indifferent between the firm distributing funds via dividends or share repurchases. By reinvesting dividends or selling shares, they can replicate either payout method on their own.C) In perfect capital markets, an open market share repurchase has no effect on the stock price, and the stock price is the same as the ex-dividend price if a dividend were paid instead.B) In a perfect capital market, when a dividend is paid, the share price drops by the amount of the dividend when the stock begins to trade ex-dividend.A) In perfect capital markets, holding fixed the investment policy of a firm, the firm’s choice of dividend policy is irrelevant and does not affect the initial share price.

True or false: When a corporation declares a dividend, its net Income on the income statement is reduced. True false question.TrueFalse

Which of the following statements is FALSE?Video: 6.C. P17-25 (Payout policy with taxes)Group of answer choicesA) Unlike with capital structure, taxes are not an important market imperfection that influence a firm's decision to pay dividends or repurchase shares.D) The optimal dividend policy when the dividend tax rate exceeds the capital gains tax rate is to pay no dividends at all.C) When the tax rate on dividends exceeds the tax rate on capital gains, shareholders will pay lower taxes if a firm uses share repurchases for all payouts rather than dividendsB) If dividends are taxed at a higher rate than capital gains, shareholders will prefer share repurchases to dividends.

Which one of the following statements is False:Group of answer choicesAn empirical study from Lintner (1956) finds that managers and investors seem more concerned with dividend changes than with dividend levels.The Miller and Modigliani (1961) dividend irrelevance proposition assumes no cost of issuing shares.In Australia, the majority of companies that distribute dividends do so on a quarterly basis.The way a firm chooses between paying dividends and retaining earnings is referred to as its payout policy.