q6) Which of the following statements is CORRECT? If Congress increases taxes on capital gains but leaves tax rates on dividends unchanged, this will motivate companies to increase stock repurchases. The clientele effect explains why firms change their dividend policies so often.. One advantage of the residual dividend policy is that it helps corporations to develop a specific and well-identified dividend clientele. If a firm splits its stock 2-for-1, then its stock price will be doubled. If a firm follows the residual dividend policy, then a sudden increase in the number of profitable projects is likely to reduce the firm's dividend payout.
q6) Which of the following statements is CORRECT? If Congress increases taxes on capital gains but leaves tax rates on dividends unchanged, this will motivate companies to increase stock repurchases. The clientele effect explains why firms change their dividend policies so often.. One advantage of the residual dividend policy is that it helps corporations to develop a specific and well-identified dividend clientele. If a firm splits its stock 2-for-1, then its stock price will be doubled. If a firm follows the residual dividend policy, then a sudden increase in the number of profitable projects is likely to reduce the firm's dividend payout.
Chapter8: Fraud, Internal Controls, And Cash
Section: Chapter Questions
Problem 17MC: What would be a reason a company would want to understate income? A. to help nudge its stock price...
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q6)
Which of the following statements is CORRECT?
If Congress increases taxes on capital gains but leaves tax rates on dividends unchanged, this will motivate companies to increase stock repurchases.
The clientele effect explains why firms change their dividend policies so often..
One advantage of the residual dividend policy is that it helps corporations to develop a specific and well-identified dividend clientele.
If a firm splits its stock 2-for-1, then its stock price will be doubled.
If a firm follows the residual dividend policy, then a sudden increase in the number of profitable projects is likely to reduce the firm's dividend payout.
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