Which of the Following Statements Is False

question 20

Multiple Choice

Which of the following statements is false?

• A) If the foreign tax rate exceeds the Canadian tax rate, companies must pay this higher rate on foreign earnings.
• B) Canadian tax policy allows companies to apply the part of the tax credit that is not used to offset domestic taxes owed, so this extra tax credit is not wasted.
• C) If the foreign tax rate is less than the Canadian tax rate, the company pays total taxes equal to the Canadian tax rate on its foreign earnings.
• D) A full tax credit is given for foreign taxes paid up to the amount of the Canadian tax liability.

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Definitions:

Private Placements

A method of raising capital through the sale of securities to a relatively small number of select investors as opposed to a public offering.

Venture Capital

Financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential.

Mezzanine Capital

A hybrid form of financing that is often used to fund the expansion of existing companies, combining elements of debt and equity financing.

Interest Payments

Regular payments made to lenders or bondholders, compensating them for lending their money.