Which of the Following Statements Is FALSE

question 7

Multiple Choice

Which of the following statements is FALSE?

• A)Tax rates vary by income,by jurisdiction,and by whether the stock is held in a retirement account.Because of these differences,firms may attract different groups of investors depending on their dividend policy.
• B)While many investors have a tax preference for share repurchases rather than dividends,the strength of that preference depends on the difference between the dividend tax rate and the capital gains tax rate that they face.
• C)Long-term investors are more heavily taxed on capital gains,so they would prefer dividend payments to share repurchases.
• D)One-year investors,pension funds,and other non-taxed investors have no tax preference for share repurchases over dividends,they would prefer a payout policy that most closely matches their cash needs.

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Definitions:

Fourteenth Amendment

An amendment to the U.S. Constitution granting citizenship to all persons born or naturalized in the United States and ensuring all citizens equal protection under the laws.

Grand Juries

A group of citizens convened to decide whether there is sufficient evidence to indict a suspect and proceed to trial.

Criminal Prosecutions

The process of charging someone with a crime and conducting a trial to determine guilt or innocence, typically led by a government prosecutor.

Right to Privacy

A legal principle that protects an individual's personal information and freedom from unwarranted intrusion by governments, organizations, and other individuals.