Which of the Following Statements Is Most Correct

question 3

Multiple Choice

Which of the following statements is most correct?

• A)Retained earnings, as reported on the balance sheet, represents the amount of cash a company has available to pay out as dividends to shareholders.
• B)70% of the interest received by corporations is excluded from taxable income.
• C)70% of the dividends received by corporations is excluded from taxable income.
• D)Because taxes on long-term capital gains are not paid until the gain is realized, investors must pay the top individual tax rate on that gain.
• E)The corporate tax system favors equity financing, as dividends paid are deductible from corporate taxes.

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Definitions:

Iconic Memory

A brief, transient visual memory that holds an exact copy of the visual stimulus for a very short period of time, usually less than a second.

Memory Systems

The structures and processes involved in the storage and retrieval of information in the brain.

ACT Models

Cognitive architecture theories that aim to simulate human thought processes, including how people represent knowledge and produce actions based on that knowledge.

Cognitive Economy

A principle in cognitive psychology that suggests the mind strives to simplify information processing by using the most efficient and simplest ways possible.