Which of the following actions will best enable a company to raise additional equity capital?
A) Declare a stock split.
B) Begin an open-market purchase dividend reinvestment plan.
C) Initiate a stock repurchase program.
D) Begin a new-stock dividend reinvestment plan.
E) Refund long-term debt with lower cost short-term debt.

Question

Quizplus · Accepted Answer

Beginning a new-stock dividend reinvestment plan allows a company to raise additional equity capital by issuing new shares to investors who opt to reinvest their dividends into new shares of the company's stock, rather than receiving the dividends in cash. This method directly increases the equity capital of the company.

Which of the Following Actions Will Best Enable a Company