Which of the Following Statements Is FALSE

question 30

Multiple Choice

Which of the following statements is FALSE?

• A)Individuals in the highest tax brackets have a preference for stocks that pay high dividends,whereas tax-free investors and corporations have a preference for stocks with no or low dividends.
• B)To compare investor preferences,we must quantify the combined effects of dividend and capital gains taxes to determine an effective dividend tax rate for an investor.
• C)The dividend-capture theory states that absent transaction costs,investors can trade shares at the time of the dividend so that non-taxed investors receive the dividend.
• D)Differences in tax preferences create clientele effects,in which the dividend policy of a firm is optimized for the tax preference of its investor clientele.

Interpret budget line shifts and their implications on consumer equilibrium in graphical analyses.

Describe the relationship between marginal utility, demand, and consumer choices.

Understand how the concept of indifference curves represents consumer preferences and the achievement of consumer equilibrium.

Analyze the decision-making process involving risk and reward, with applications to criminal behavior.

---

Definitions:

Generalized Other

A concept in sociology that represents the general expectations of society that individuals take into account when shaping their behavior.

Significant Others

People who play important roles in the early socialization experiences of children.

Culture's Standards

The measures and norms that are adopted and recognized within a culture to guide behavior, practices, and evaluations of what is deemed acceptable or desirable.