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A Company Begins a Dividend Reinvestment Plan

Question 36

Multiple Choice

A company begins a dividend reinvestment plan. 83% of shareholders enroll. Which of the following is false?


A) The clientele dividend theory does not hold.
B) The current dividend payment policy is less than optimal.
C) Shareholders support current managerial activities.
D) The reinvested dividends will be taxed as capital gains.

Correct Answer:

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