Which of the following statements is most correct?
A) An open-market dividend reinvestment plan is likely to be attractive to companies that are looking to issue additional shares of common stock.
B) Stock repurchases have the effect of reducing financial leverage.
C) If a company does a 2-for-1 stock split, its stock price will roughly double.
D) All of the answers above are correct.
E) None of the answers above is correct.

Question

Quizplus · Accepted Answer

An open-market dividend reinvestment plan does not involve issuing new shares, stock repurchases increase financial leverage by reducing equity, and a 2-for-1 stock split halves the stock price, not doubles it.

Which of the Following Statements Is Most Correct