Which of the following statements is FALSE? A. Like Johnson & Johnson (JNJ), nearly all of the 30 Dow Jones Industrial companies were forced to reduce their dividends per share in 2009 and again in 2010 due to the Great Recession. B. Apple paid its first dividend to common shareholders in 2012, and Berkshire Hathaway has not yet paid dividends to common shareholders. C. The dividend yield on the S&P500 has been approximately 2% in recent decades, and tends to be lower when prices rise. D. Share repurchases have become more common over the past half century, and over the same period, the dividend yield has trended downward.

Question

Magdalena Hess

Business

19 April, 18:02

Which of the following statements is FALSE? A. Like Johnson & Johnson (JNJ), nearly all of the 30 Dow Jones Industrial companies were forced to reduce their dividends per share in 2009 and again in 2010 due to the Great Recession. B. Apple paid its first dividend to common shareholders in 2012, and Berkshire Hathaway has not yet paid dividends to common shareholders. C. The dividend yield on the S&P500 has been approximately 2% in recent decades, and tends to be lower when prices rise. D. Share repurchases have become more common over the past half century, and over the same period, the dividend yield has trended downward.

+1

Answers (1)

Know the Answer?

Carley Goodman · Answer 1

The answer is: A. Like Johnson & Johnson (JNJ), nearly all of the 30 Dow Jones Industrial companies were forced to reduce their dividends per share in 2009 and again in 2010 due to the Great Recession.

Explanation:

That is not true since most companies that are included in the Dow Jones Industrial Average did not cut dividends during 2008 and 2009. Some companies like 3M (since 1916 it has never stopped paying dividends) even increased their dividends back then. Other companies like Coca Cola, United Technologies and Procter & Gamble have been paying uninterrupted dividends since the early 20th century.

It is always much easier for a company to not start paying any dividends at all, than to pay dividends and then stop paying them. When companies stop paying dividends their stock price usually plunges.