Which of the following statements is correct?

Multiple Choice

• Companies pay out as dividends whatever is left over after making needed capital investments.
• A stock repurchase does not increase stock price but it does avoid the fall in price that would occur on the ex-dividend date.
• Companies with large repurchase programs usually finance them by a cut in dividends.
• Investors rightly prefer repurchases because the reduced number of shares increases earnings per share.