Use the Information for the Question(s) Below

question 3

Multiple Choice

Use the information for the question(s) below.
Consider the following tax rates:
The current tax rates are set to expire in 2008 unless Congress extends them. The tax rates shown are for financial assets held for one year. For assets held less than one year, capital gains are taxed at the ordinary income tax rate (currently 35% for the highest bracket) ; the same is true for dividends if the assets are held for less than 61 days.
-In 2006,Luther Industries paid a special dividend of $5 per share for the 100 million shares outstanding.If Luther had instead retained that cash permanently and invested it into Treasury Bills earning 6%,then the present value of the additional taxes paid by Luther would be closest to:

• A) $35 million
• B) $290 million
• C) $175 million
• D) $585 million

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Definitions:

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Digital games that are played over the internet, allowing multiple players to interact within a virtual game environment.

Dependent Variable

A factor in a study or experiment anticipated to vary as a result of modifications in the independent variable.

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A medical condition characterized by an excessive amount of body fat, which poses a risk to health.

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An electronic device for receiving television broadcasts and displaying them visually, historically significant in mass media and entertainment.