Multiple Choice
Which of the following statements is most correct?
A) "New-stock" dividend reinvestment plans are similar to stock dividends because they both increase the number of shares outstanding but don't change the total equity of a firm.
B) Investors receiving stock dividends must pay taxes on the new shares at the time the stock dividends are received.
C) Stockholders pay no income tax on dividends reinvested in a dividend reinvestment plan.
D) Both statements a and b are correct.
E) None of the statements above is correct.
Correct Answer:
Verified
Correct Answer:
Verified
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