Which of the Following Statements Is False

question 67

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) But because long-term investors can defer the capital gains tax until they sell, there is still a tax advantage for share repurchases over dividends.

---

Definitions:

Hindbrain

The posterior portion of the brain comprising the cerebellum, pons, and medulla oblongata, involved in regulating basic life functions.

Hypothalamus

A region of the brain below the thalamus, coordinating both the autonomic nervous system and the activity of the pituitary, controlling body temperature, hunger, thirst, and other processes that regulate body equilibrium.

Hunger Signals

Physiological cues sent by the body to indicate the need for food intake, involving hormones, the central nervous system, and other bodily mechanisms.

Satiety Signals

Internal biological signals sent by the body to indicate fullness and control food intake.