A Stockholder Who Received a 10% Common Stock Dividend Would

question 36

Multiple Choice

A stockholder who received a 10% common stock dividend would have an increase in her/his ownership percentage equal to:

• A)10%
• B)20%
• C)cannot be determined from the information given
• D)there would be no change in the ownership percentage

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Definitions:

Average Tax Rate

The portion of total income that is paid as tax, calculated by dividing the total amount of taxes paid by the taxpayer’s total income.

Tax Liability

The total amount of tax that an individual or entity is legally obligated to pay to a taxing authority.

Regressive

Pertains to a situation or policy that has a disproportionately greater impact on those with lower income or status.

Excise Tax

A tax imposed on the sale or manufacture of specific goods, such as alcohol and tobacco, within a country.