Investing in Non-Dividend-Paying Stock That Is Expected Toappreciate Yearly by 5

question 10

Multiple Choice

Investing in non-dividend-paying stock that is expected toappreciate yearly by 5 percent instead of investing in 5 percent corporate bonds is an example of tax planning by:

• A)spreading income through portfoliodiversification
• B)avoiding income recognition
• C)changing the timing of recognition of taxable income
• D)changing the character of income

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Definitions:

Statement Of Financial Position

Another term for the balance sheet, showing a company's assets, liabilities, and shareholders' equity at a specific point in time.

Order Of Decreasing Liquidity

A ranking of assets on a balance sheet based on their ease of conversion to cash without loss of value.

Order Of Importance

A principle of organization where information is prioritized and arranged according to its significance.