Kappa Corp Has Just Raised Its Dividend from $2

Kappa Corp has just raised its dividend from $2.50 to $5 per share.(It plans to reduce its repurchases by a similar amount.) Caterina Chekov,who owns 100 shares of Kappa does not need the extra cash.What can she do to offset the change in dividend policy?

A) reinvest the extra dividend in Kappa stock.
B) sell $250 of Kappa stock each year.
C) borrow $250 and invest it in Kappa stock.
D) Nothing. She should sell out and invest elsewhere.

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free