Relative to Local (Foreign) Competition, Foreign-Source Income Is Most Valuable

question 25

Multiple Choice

Relative to local (foreign) competition, foreign-source income is most valuable to a U.S.-based firm when ______.

• A) the income is from a low-tax country and the firm has excess foreign tax credits
• B) the income is from a high-tax country and the firm has excess foreign tax credits
• C) the income is from a low-tax country and the firm has no excess foreign tax credits
• D) the income is from a high-tax country and the firm has no excess foreign tax credits
• E) None of the above

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Definitions:

Par Value

The nominal or face value of a bond, share, or coupon as stated by the issuer.

Market Price

The up-to-the-minute market price for assets or services open for buy or sell transactions.

Dividends

Funds distributed by a company to its shareholders from its profits.

Modest Dividend

A relatively small or conservative amount paid out to shareholders from a company's earnings.