A Corporation's Effective Tax Rate as Computed in Its Income

question 22

True/False

A corporation's effective tax rate as computed in its income tax note is the company's cash tax rate for the year.

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Definitions:

Dividend Distributions

Payments made by a corporation to its shareholders, usually derived from the company's earnings.

Cumulative Voting

A voting system that allows shareholders to concentrate their votes on a single candidate for the board of directors.

Board of Directors

A group of individuals elected by shareholders to oversee the management and make major decisions for a company.

Preferred Stock

A class of ownership in a corporation with a fixed dividend that must be paid out before dividends to common stockholders and which typically does not have voting rights.