Which statement about dividend policies is correct?
A)Stock splits, stock dividends, and reverse splits are all designed to make the firm's shares more appealing to the average investor.
B)Dividend reinvestment plans are designed to aid in the distribution of stock dividends.
C)The key advantage of a residual dividend policy is that it enables a company to follow a stable dividend policy.
D)The main goal of the share repurchases is solely to avoid taxes for investors.

Question

Quizplus · Accepted Answer

Stock splits, stock dividends, and reverse splits are methods companies use to adjust the number of shares outstanding and the share price, making the stock more appealing or accessible to investors. These actions can influence investor perception and stock market performance, but they do not directly impact the company's value.

Which Statement About Dividend Policies Is Correct