Dividend Payments That Are the Result of Liquidation of Assets

question 60

Multiple Choice

Dividend payments that are the result of liquidation of assets are known as ________ and are taxed as capital gains.

• A)return of capital
• B)rolling dividends
• C)alternate payments
• D)private earnings
• E)special dividends

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Definitions:

Time Value

The viewpoint that money in one's possession now is considered more valuable than the same amount in the future, thanks to its ability to generate profits.

Money

A medium of exchange, a unit of account, and a store of value used to facilitate transactions and measure the value of goods and services.

Monthly Compounding

The process of calculating interest earnings on a principal amount, where the interest is added back to the principal at the end of each month, increasing the base for calculating future interest.

Future Value

Future worth of cash or an asset that is akin in value to a nominated sum in the present.