Which of the following statements is NOT CORRECT?
A) Stock repurchases can be used by a firm as part of a plan to change its capital structure.
B) After a 3-for-1 stock split,a company's price per share should fall,but the number of shares outstanding will rise.
C) Investors may interpret a stock repurchase program as a signal that the firm's managers believe the stock is undervalued,or,alternatively,as a signal that the firm does not have many good investment opportunities.
D) A company can repurchase stock to distribute a large one-time cash inflow,say from the sale of a division,to stockholders without having to increase its regular dividend.
E) Stockholders pay no income tax on dividends if the dividends are used to purchase stock through a dividend reinvestment plan.

Question

Quizplus · Accepted Answer

Stockholders will still have to pay income tax on dividends received, even if they use those dividends to purchase additional stock through a dividend reinvestment plan.

Which of the Following Statements Is NOT CORRECT