Which of the Following Statements Is FALSE

question 39

Multiple Choice

Which of the following statements is FALSE?

• A)Unlike with capital structure,taxes are not an important market imperfection that influence a firm's decision to pay dividends or repurchase shares.
• B)If dividends are taxed at a higher rate than capital gains,which has been true until the most recent change to the tax code,shareholders will prefer share repurchases to dividends.
• C)Shareholders typically must pay taxes on the dividends they receive.They must also pay capital gains taxes when they sell their shares.
• D)Because long-term investors can defer the capital gains tax until they sell,there is still a tax advantage for share repurchases over dividends.

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Definitions:

Interpretation

The act of explaining or determining the meaning of something, often relating to text, speech, signs, or actions.

Ombudsman

An independent official appointed to investigate individuals' complaints against maladministration, especially that of public authorities.

Workplace Disputes

Conflicts that arise in the workplace over issues such as working conditions, employee rights, and management practices.

Determination

The resolve or firmness of purpose someone has in pursuing a goal, often in the face of adversity.