A Tax for Which the Average Tax Rate Remains Constant

question 60

Multiple Choice

A tax for which the average tax rate remains constant at all levels of income is defined as a

• A) regressive tax.
• B) proportional tax.
• C) neutral tax.
• D) progressive tax.

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Definitions:

Stock Ownership

Stock ownership refers to the possession of shares in a corporation, which represents a claim on part of the company's assets and earnings.

Residual View

In corporate finance, this concept suggests that dividends should be paid from the residual or remaining equity after all project investments with positive NPV have been funded.

Dividends

Payments made by a corporation to its shareholder members, representing a portion of the corporate profits.

Transaction Costs

Expenses incurred when buying or selling securities, including broker fees, commissions, and other charges.