Palomino Enterprises Has Generated Profits of $100 000 Before Tax

question 20

Multiple Choice

Palomino Enterprises has generated profits of $100 000 before tax. They wish to invest the money in Treasury bonds 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 30%, which option will shareholders prefer? Assume a dividend imputation system applies.

• A)indifferent between options
• B)immediate cash dividend
• C)dividend after one year
• D)cannot determine

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Definitions:

The Looking-glass Self

A sociological concept suggesting that an individual's self-concept is shaped by how they perceive others view them, acting as a social mirror.

The I and the Me

A concept in sociology that describes the individual's perception of themselves (the "I") and the social self as perceived by others (the "Me").

Role-taking

The process of assuming the perspective of another person to understand their thoughts, feelings, or actions, a concept in social psychology.

Peer Involvement

The active participation or engagement of individuals within a peer group, often influencing behaviors, attitudes, or learning.