Private Co

question 6

Multiple Choice

Private Co.received a $5,000 eligible dividend from Public Co.,which is a non-connected corporation.Which of the following applies?

• A)The dividends can be reinvested by Private Co.on a tax-free basis.
• B)The dividend will be subject to Part I tax.
• C)The dividend will be subject to Part IV tax at rate of 38 1/3%.
• D)Receipt of the dividend will result in an immediate dividend refund for Private Co.

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