Use the Following Information to Answer the Question(s)below

question 48

Multiple Choice

Use the following information to answer the question(s) below.
Suppose that all capital gains are taxed at a 20% rate,and that the dividend tax rate is 40%.Rearden Metal is currently trading for $40 per share,and is about to pay a $5 special dividend.
-The effective dividend tax rate for an investor in Rearden Metal is closest to:

• A)0%.
• B)20%.
• C)25%.
• D)30%.

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Definitions:

Nonsense Syllables

A set of letters that do not form known words, used in psychological experiments to study memory and learning processes.

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A language that is not the native language of the speaker, but that is used in the area where they are living or while visiting another country.

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