Which of the Following Statements Is Most Correct

question 3

Multiple Choice

Which of the following statements is most correct?

• A)Retained earnings, as reported on the balance sheet, represents the amount of cash a company has available to pay out as dividends to shareholders.
• B)70% of the interest received by corporations is excluded from taxable income.
• C)70% of the dividends received by corporations is excluded from taxable income.
• D)Because taxes on long-term capital gains are not paid until the gain is realized, investors must pay the top individual tax rate on that gain.
• E)The corporate tax system favors equity financing, as dividends paid are deductible from corporate taxes.

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Definitions:

United States

The United States is a country in North America, known for its significant influence on global economic, political, and cultural affairs.

Trade

The trading of goods, services, or a combination of both among two or more entities.

Large Cities

Urban areas with a large population density and extensive systems for housing, transportation, sanitation, utilities, land use, and communication.

Day-to-Day Activities

The regular or routine actions that individuals undertake on a daily basis for personal or professional purposes.