Which of the Following Forms of Earnings Distributions Would Not

question 18

Multiple Choice

Which of the following forms of earnings distributions would not be subject to double taxation at the corporate and shareholder level?

• A)Dividend
• B)Stock redemption
• C)Partial liquidation
• D)Compensation paid to a shareholder/employee of the corporation.

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Definitions:

Fully-Funded Pension Plan

A pension plan that has enough assets to provide for all accrued benefits owed to participants.

Equities

Shares of ownership in a company, representing a claim on part of the company's assets and earnings.

Contingent Immunization

A mixed passive-active strategy that immunizes a portfolio if necessary to guarantee a minimum acceptable return but otherwise allows active management.

Risk Tolerance

An investor's ability or willingness to endure market volatility and potential loss in the value of investments.