Because of the Tax Laws of the 1960s and 1970s

question 109

Multiple Choice

Because of the tax laws of the 1960s and 1970s, when dividends were taxed more heavily than capital gains, shareholders preferred that corporations:

• A) pay dividends annually.
• B) keep free cash flows for investment in acquisitions.
• C) distribute capital gains regularly.
• D) increase managerial salaries.

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Definitions:

Classical Conditioning

A teaching process in which two stimuli are repeatedly linked; a response that is initially prompted by the second stimulus becomes prompted by only the first stimulus over time.

Observational Learning

Learning that occurs by observing and imitating the behaviors of others.

Observational Learning

Learning that occurs through observing the behaviors of others and the outcomes of those behaviors.

Bandura

Albert Bandura was a psychologist renowned for his work on social learning theory, suggesting that people can learn through observation, imitation, and modeling.