Which of the Following Statements Is FALSE

question 21

Multiple Choice

Which of the following statements is FALSE?

• A)When a firm pays a dividend,shareholders are taxed according to the dividend tax rate.If the firm repurchases shares instead,and shareholders sell shares to create a homemade dividend,the homemade dividend will be taxed according to the capital gains tax rate.
• B)When the tax rate on dividends exceeds the tax rate on capital gains,shareholders will pay lower taxes if a firm uses share repurchases for all payouts rather than dividends.
• C)Firms that use dividends will have to pay a lower pre-tax return to offer their investors the same after-tax return as firms that use share repurchases.
• D)The optimal dividend policy when the dividend tax rate exceeds the capital gain tax rate is to pay no dividends at all.

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Definitions:

Physical Work Conditions

Aspects of the work environment that impact employees' physical health and safety, such as ergonomics, noise, and temperature.

Hawthorne Effect

The phenomenon in which participants alter their behavior due to their awareness of being observed in an experiment or study.

Performance Increase

A performance increase refers to the improvement in the execution or outcome of a task or activity, often as a result of practice, training, or modifications in approach.

Observed

A term referring to something that has been seen, noticed, or monitored.