Identify Which of the Following Statements Is True

question 56

Multiple Choice

Identify which of the following statements is true.

• A)P Corporation receives a dividend from its 100%-owned subsidiary corporation S. P and S have filed consolidated tax returns for a number of years. The dividend payment is out of S's earnings and profits and reduces P's investment in S. The dividend is an intercompany transaction and excluded from P's gross income.
• B)The consolidated dividends-received deduction percentage for dividends received by one affiliated group member from another affiliated group member is always 100%.
• C)The dividends-received deduction claimed when a $50,000 dividend is received from a 100%-owned nonconsolidated life insurance company is $35,000 (ignoring any dividends-received deduction limitations).
• D)All of the above are false.

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Definitions:

Linear Demand Curve

A graphical representation of demand that shows a direct, constant relationship between price and quantity demanded.

Total Revenue

Total Revenue is the total income generated by a firm from selling its goods or services, calculated as the unit price multiplied by the quantity sold.

Quantity Demanded

Quantity demanded is the total amount of a good or service that consumers are willing and able to purchase at a specific price point, holding other factors constant.

Price Elasticity of Demand

measures how much the quantity demanded of a good responds to a change in the price of that good, quantified as the percentage change in quantity demanded divided by the percentage change in price.