Private Co

question 1

Multiple Choice

Private Co. received a $5,000 dividend from Public Co., which is a non-connected corporation. Which of the following applies?

• A) The dividend will be subject to a tax rate of 38 1/3%.
• B) The dividends can be reinvested by Private Co. on a tax-free basis.
• C) Receipt of the dividend will result in an immediate dividend refund for Private Co.
• D) The dividend will be subject to Part I tax.

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Definitions:

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the official currency of the United States, widely used as a standard of exchange in international markets.

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