To Calculate the Taxes Owing on Dividends Received from Canadian

question 81

Multiple Choice

To calculate the taxes owing on dividends received from Canadian corporations,investors must undertake the following calculations:

• A)Gross up the dividend received; apply this amount to their marginal tax rate; and received the federal and provincial dividend tax credit.
• B)Gross up the dividend received; apply this amount to their marginal tax rate; and received the federal tax credit.
• C)Gross up the dividend received; apply this amount to their average tax rate; and received the federal and provincial dividend tax credit.
• D)Apply the amount of the dividend received to their marginal tax rate and received the federal and provincial dividend tax credit.
• E)Apply the amount of the dividend received to their average tax rate and received the federal and provincial dividend tax credit.

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Definitions:

N Risky Securities

A term referring to a collection of investments that carry a significant level of risk, where 'N' indicates the number or variety of such risky assets.

Risk Level

The potential for losing something of value, measured in the context of investment as the uncertainty regarding the return or the possibility of losing some or all of the original investment.

Capital Allocation Line

A line on a graph that shows the risk-reward ratio of different portfolios, helping investors understand their options for achieving a desired balance.

Risk-averse Investors

Investors who prefer to minimize uncertainty and potential loss in their investment choices, often opting for safer, more predictable investments.