Palo Alto Enterprises Has $100,000 in Cash

question 57

Multiple Choice

Palo Alto Enterprises has $100,000 in cash.They wish to invest the money in Treasury bills at 6% and use the returns to pay dividends to shareholders after a year.Alternately they can pay a dividend and allow shareholders to make the investment.If corporate tax rates are 35%,which option will shareholders prefer?

• A)immediate cash dividend
• B)dividend after one year
• C)prefer half from each source
• D)indifferent between options

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Definitions:

Individualism

Giving priority to one’s own goals over group goals and defining one’s identity in terms of personal attributes rather than group identifications.

Gender Schemas

Cognitive structures that dictate the understanding and interpretation of gendered expectations and behaviors in society.

Peer Influence

The impact that peers, or individuals of similar age and status, have on one another's attitudes, behaviors, and understanding of the world.

Parental Influence

The impact that parents have on their children’s development, beliefs, behaviors, and values through their actions, teachings, and interactions.