In June of the Current Year, Marigold Corporation Declares a $4

question 148

Multiple Choice

In June of the current year, Marigold Corporation declares a $4 dividend out of E & P on each share of common stock to shareholders of record on August 1. Ellen and Tim each purchase 100 shares of Marigold stock on July 1. On July 15, Ellen also purchases a short position in Marigold. Tim sells 50 of his shares on August 10 and continues to hold the remaining 50 shares through the end of the year. Ellen closes her short position in Marigold on October 15. With respect to the dividends, which of the following is correct?

• A) Ellen will have $400 of qualifying dividends subject to reduced tax rates and $400 of ordinary income (from dividends paid on the short position of Marigold stock).
• B) Tim will have $200 of qualifying dividends subject to reduced tax rates and $200 of ordinary income.
• C) All $800 of Ellen's dividends will qualify for reduced tax rates.
• D) All $400 of Tim's dividends will qualify for reduced tax rates.
• E) None of the above.

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Definitions:

Canadian Charter of Human Rights and Freedoms

A foundational document in Canada that guarantees fundamental freedoms and rights to all Canadians, including freedom of expression, equality rights, and the right to a fair trial.

Employment References

Recommendations provided by former employers or colleagues that attest to an individual's skills, character, and performance in previous job roles.

Objectivity and Candour

The practice of being impartial and honest in expression, avoiding bias, and straightforward communication.

Employee Turnover

The rate at which employees leave a company and are replaced by new hires, considered as an indicator of workplace satisfaction and stability.