Which of the following statements is most correct?
A) In general, stock repurchases are taxed the same way as dividends.
B) One nice feature of dividend reinvestment plans is that they enable investors to reduce the taxes paid on their dividends.
C) On average, companies send a negative signal to the marketplace when they announce an increase in their dividend.
D) If a company is interested in issuing new equity capital, a new stock dividend reinvestment plan probably makes more sense than an open market dividend reinvestment plan.
E) Statements b and d are correct.

Question

Quizplus · Accepted Answer

A new stock dividend reinvestment plan allows the company to issue new shares directly to investors, which can be beneficial if the company is looking to raise new equity capital.

Which of the Following Statements Is Most Correct