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Which of the following statements is most correct?




Which of the following statements is most correct?;a. The tax code encourages companies to pay dividends.;b. If a company uses the residual dividend model to determine its dividend payout ratio, its dividend payout will tend to increase whenever it has a large number of investment opportunities.;c. The clientele effect encourages companies to adopt a strict version of the residual dividend model.;d. In many cases, stock repurchases tend to increase earnings per share, but they also increase the firm's debt ratio and financial risk.;e. Stock repurchases are taxed the same way as dividends are taxed.


Paper#31274 | Written in 18-Jul-2015

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