Kizspy Question: 25
(Choose 1 answer)
Which of the following statements about the relative advantages of stock repurchases over dividends is NOT
true?
A. Since most ongoing stock repurchase programs are as visible as dividend programs, they can be used
effectively to send a positive signal about a firm's prospects to investors.
B. Open-market stock purchases allow management more flexibility because investors are less likely to react
if the management cuts back or ends a stock repurchase as compared to cutting back on dividend payments.
C. Stock repurchases allow stockholders to choose whether or not to participate in the stock repurchase.
This allows stockholders to have more control over their tax burden.
D. Historically, taxes on dividend payment have been higher than those on stock repurchases.
