When Issuing Stock to Obtain Long-Term Funding, Dividend Payments Are

question 69

Multiple Choice

When issuing stock to obtain long-term funding, dividend payments are

• A) tax deductible.
• B) legally required.
• C) intended to discourage firms from issuing an excessive number of shares.
• D) not tax deductible.

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Definitions:

Retained Earnings

The portion of net income left over for the business after it has paid out dividends to its shareholders, often reinvested into the business.

Ledger Accounts

Records within a ledger that summarize all the transactions related to a specific account, providing a complete record of financial transactions over the life of the account.

Net Income

The sum a company earns net of all expenses and taxes, deducted from its overall revenue.

Rent Revenues

Income earned by a company or individual from leasing property or other assets to tenants.