Which of the Following Statements Regarding "Taxation of Dividends and Capital

question 13

Multiple Choice

Which of the following statements regarding "taxation of dividends and capital gains under current tax law" is incorrect (assuming that the marginal tax rate for a large corporation is 35%) ?

• A) For-profit corporations have a tax reason to prefer dividends.
• B) Corporations pay corporate income tax on only 30% of any dividends received.
• C) The effective tax rate on dividends received by large corporations is 35% of the marginal corporate tax rate.
• D) Corporations have to pay a 35% tax on the full amount of any realized capital gain.

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Definitions:

Companionate Love

A form of love characterized by deep affection, attachment, and commitment, typically found in long-term relationships.

Physiological Desire

An innate biologically-driven urge, such as hunger or thirst, that prompts an individual to fulfill a need.

Personal Attributions

Explanations for individuals' behavior that relate to their personal characteristics, such as abilities, emotions, or efforts.

Passionate Love

An intense emotional and physical attraction to someone, often characterized by a desire for union and connection.