Assume there are no taxes or imperfections.Given this assumption, which one of the following statements is correct?
A) A cash dividend has no effect on the market price of the payer's stock.
B) A cash dividend decreases shareholder wealth.
C) Stock repurchases decrease the market value per share.
D) Both a cash dividend and a share repurchase increase a firm's PE ratio.
E) A stock repurchase has the same effect on a firm's market value balance sheet as does a cash dividend.
Correct Answer:
Verified
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