Which of the Following Statements Is FALSE

question 39

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)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:

Better Business Bureau

An organization focused on advancing marketplace trust, consisting of independently incorporated local BBB organizations in the US and Canada, which review businesses, charities, and advertisements for authenticity and ethical conduct.

National Charity Seal

A designation awarded to charitable organizations that meet certain standards of transparency, accountability, and effectiveness, serving as a mark of distinction.

Transparency

The practice of being open, honest, and straightforward about various activities, allowing stakeholders to have clarity and understanding.

Performance

The act of executing or accomplishing something, such as a task or action, measured against known standards or criteria.