Which of the Following Statements Best Describes Income Trusts

question 39

Multiple Choice

Which of the following statements best describes income trusts?

• A) As income trust cash distributions are taxed at each unitholder's full tax rate, a higher tax liability results.
• B) The administrative costs can be higher with an income trust structure relative to a corporate counterpart.
• C) Income trust units cannot be held as equity securities.
• D) Cash flows distributed to unitholders are paid after the corporate taxes.

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Definitions:

Troposphere

The lowest layer of Earth's atmosphere where most of the planet's weather occurs, extending up to about 10 km above the surface.

Chemically Unreactive

Describes substances that do not easily undergo chemical reactions or change their chemical structure in the presence of other substances.

Reflectivity

The measure of the proportion of light or radiation that is reflected by a surface, often impacting climate and temperature.

Earth's Climate

The global patterns of weather and atmospheric conditions affecting the entire Earth, influenced by solar radiation, oceans, landforms, and human activity.