Which of the Following Statements Is FALSE

question 14

Multiple Choice

Which of the following statements is FALSE?

• A)While firms do still pay dividends,substantial evidence shows that many firms have recognized their tax disadvantage.
• B)The fact that firms continue to issue dividends despite their tax disadvantage is often referred to as the dividend puzzle.
• C)At the end of the 1990s,dividend payments exceeded the value of repurchases for U.S.industrial firms.
• D)While evidence is indicative of the growing importance of share repurchases as a part of firms' payout policies,it also shows that dividends remain a key form of payouts to shareholders.

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Definitions:

Tax Rate

The percentage at which an individual or corporation is taxed.

Constructive Receipt

The tax principle that income is taxed when it is actually or constructively received, not necessarily when it is earned.

Control

The ability or authority to guide or manage operations, decisions, and policies of a business or project.

Income

Earnings received by an individual or entity, including wages, salaries, investments, and other forms of compensation, which are subject to tax.