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Which of the following statements is most correct?

Which of the following statements is most correct?

a. The tax code encourages companies to pay dividends.
b. If a company uses the residual dividend model to determine its dividend payout ratio, its dividend payout will tend to increase whenever it has a large number of investment opportunities.
c. The clientele effect encourages companies to adopt a strict version of the residual dividend model.
d. In many cases, stock repurchases tend to increase earnings per share, but they also increase the firm's debt ratio and financial risk.
e. Stock repurchases are taxed the same way as dividends are taxed.

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Top Answer

Dear Student ====================== d. In many cases, stock repurchases... View the full answer

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