39.) Which of the following reduces the number of outstanding shares and increases the share price proportionately?

a. A DRIP.

b. A reverse stock split.

c. A stock dividend.

d. A stock spin-off.

40.) Investors are willing to pay a premium for predictable dividends because:

a. The return is always higher than capital appreciation.

b. Dividends reduce uncertainty.

c. From a tax standpoint, dividend income is preferred over capital gain income.

d. Constant, predictable dividends are very rare.