Which of the Following Statements Is FALSE

question 15

Multiple Choice

Which of the following statements is FALSE?

• A)Tax rates vary by income,by jurisdiction,and by whether the stock is held in a retirement account.Because of these differences,firms may attract different groups of investors depending on their dividend policy.
• B)While many investors have a tax preference for share repurchases rather than dividends,the strength of that preference depends on the difference between the dividend tax rate and the capital gains tax rate that they face.
• C)Long-term investors are more heavily taxed on capital gains,so they would prefer dividend payments to share repurchases.
• D)One-year investors,pension funds,and other non-taxed investors have no tax preference for share repurchases over dividends,so they would prefer a payout policy that most closely matches their cash needs.

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Definitions:

Assembly Department

A division within a manufacturing process where parts are assembled to create a final product.

Conversion Cost

The sum of direct labor and overhead costs associated with transforming raw materials into finished goods.

Cooking Department

A segment within a manufacturing or culinary operation where raw materials are prepared, cooked, or processed.

First-In, First-Out Method

An inventory valuation method where the first items placed in inventory are the first ones sold, typically used to manage costs and stock.