Use the Following Information to Answer the Question(s) Below

question 39

Multiple Choice

Use the following information to answer the question(s) below.
Suppose that all capital gains are taxed at a 20% rate, and that the dividend tax rate is 40%. Rearden Metal is currently trading for $40 per share, and is about to pay a $5 special dividend.
-Which of the following equations is INCORRECT?

• A) P_cum - P_ex = Div ×
• B) P_cum - P_ex = Div ×
• C) =
• D) (P_cum - P_ex)(1 - τ_d) = Div(1 - τ_g)

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Definitions:

Geospiza Fortis

A species of bird in the Darwin's finch group, found in the Galapagos Islands, known for its variable beak size, which has been subject to natural selection studies.

Beak Depth

Beak depth refers to the vertical measurement of a bird's beak from the top to the bottom, which can affect its ability to access different types of food and thus play a role in natural selection.

Response To Selection

The process by which certain traits become more or less common in a population due to their impact on the survival and reproduction of their bearers.

Selection Differential

The difference between the average trait of the selected individuals for breeding and the average trait of the general population, indicating the potential for evolutionary change.