Which of the Following Statements Is Correct

question 93

Multiple Choice

Which of the following statements is correct?

• A) For the most part,our federal tax rates are progressive,because higher incomes are taxed at higher average rates.
• B) Bonds issued by a municipality such as the city of Miami would carry a lower interest rate than bonds with the same risk and maturity issued by a private corporation such as Florida Power & Light.
• C) Our federal tax laws tend to encourage corporations to finance with debt rather than with equity securities.
• D) Our federal tax laws encourage the managers of corporations with surplus cash to invest it in stocks rather than in bonds.However,other factors may offset tax considerations.
• E) All of the above statements are true.

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Definitions:

Integrated Disclosures

A comprehensive approach to corporate reporting that combines financial, environmental, and social performance information.

Common Stock Market

A marketplace for the buying and selling of equity securities or shares representing ownership in publicly traded companies.

Dividends

Payments made by a corporation to its shareholders, usually in the form of cash or additional shares, from the company's profits.

Stockholders' Equity

The residual interest or value that shareholders have in a company after all liabilities are subtracted from the assets.