Which of the Following Statements Is FALSE

question 33

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.

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Definitions:

Triple Bottom Line

A sustainability framework that evaluates a company's performance based on three pillars: social, environmental, and financial factors.

CSR Activities

Corporate Social Responsibility actions undertaken by companies to positively impact society, the environment, and their communities.

Internal Attributions

The process of explaining behavior as being caused by internal characteristics of the individual rather than external factors.

External Attributions

The process of ascribing the cause of an observed behavior to situational factors outside the individual, rather than to internal dispositions.