Corporations May Have a Legitimate Preference for Dividends Over Capital

question 39

Multiple Choice

Corporations may have a legitimate preference for dividends over capital gains because:

• A) capital gains have a 50% tax rate.
• B) dividends received by corporations are not taxable.
• C) 30% of dividends received by corporations are exempt from taxation.
• D) 70% of dividends received by corporations are exempt from taxation.

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Definitions:

Union Instrumentality

The perceived effectiveness of labor unions in achieving desired outcomes such as higher wages, job security, and better working conditions for their members.

Utility Maximization

The economic principle that individuals or entities attempt to obtain the greatest satisfaction or utility from their available resources.

General Beliefs

Widely held opinions or convictions concerning various topics or principles.

Bargaining Unit

A cohort of workers, characterized by mutual interests, and represented by one labor union in discussions for collective agreements.