1. Which of the following statement is NOT correct?

A. Individuals in upper-income tax brackets might prefer lower dividend payouts

B. Stock dividends increase the number of outstanding shares

C. Managers are reluctant to cut dividends

D. Most investors prefer low dividend payouts and will buy stock in those companies that offer low dividend payouts.

2. You can receive cash in two ways when you buy stocks:

i. The company pays dividends

ii. The company pays stock dividends

iii. Sell the stocks

iv. Convert stocks into bond

A. i and ii

B. ii and iii

C. iii and iv

D i and iii

3. Which of the following is NOT the major financial statement?

A. Balance Sheet

B. Adjusted Trial Balance

C. Income Statement

D. Cash Flow Statement