Which of the Following Benefits Does Not Occur When Owner-Shareholders

question 91

Multiple Choice

Which of the following benefits does not occur when owner-shareholders accumulate earnings of their closely-held corporations at the entity level and later sell their stock at an increased value?

• A) Deferral of shareholder tax until the year of sale.
• B) Conversion of ordinary income into capital gain.
• C) Increase in corporate capitalization and reduction in debt-equity ratio.
• D) All of these choices occur when owner-shareholders accumulate earnings of the closely-held corporations.

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Definitions:

BDI

Brand Development Index, a measure of a brand's sales performance within a specific market segment or geographic area compared to its performance elsewhere.

Brand Position

The place a brand occupies in the minds of customers and how it is differentiated from competitors.

CDI

Consumer Decision Interface; typically referring to tools or platforms that assist consumers in making purchasing choices. If meant as "Category Development Index," it's a measure of the sales performance of a category of goods within a specific market segment.

Market Segment

A portion of a larger market that is categorized based on shared characteristics, needs, or preferences of its members.