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

question 59

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.
-Suppose that Rearden Metal made a surprise announcement that it would do a share repurchase rather than pay a special dividend.The net tax savings per share for an investor that would result from this decision is closest to:

• A)$1.25.
• B)$3.75.
• C)$4.00.
• D)$5.00.

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Definitions:

Sensory Relay Station

A term typically referring to the thalamus, a structure in the brain that serves as a hub for transmitting sensory information to the cerebral cortex.

Pituitary

A small, pea-sized gland located at the base of the brain, known as the "master gland," it regulates vital body functions and general wellbeing.

Pons

A part of the brain located above the medulla oblongata and below the midbrain, playing a crucial role in regulating breathing, communication between different parts of the brain, and sensations such as hearing, taste, and balance.

Forebrain

The anterior part of the brain, including the cerebrum and diencephalon, responsible for processing sensory information and controlling motor functions.