Which of the Following Statements Regarding Constructive Dividends Is Not

question 41

Multiple Choice

Which of the following statements regarding constructive dividends is not correct?

• A) Constructive dividends do not need to be formally declared or designated as a dividend.
• B) Constructive dividends need not be paid pro rata to the shareholders.
• C) Corporations that receive constructive dividends may not use the dividends received deduction.
• D) Constructive dividends are taxable as dividends only to the extent of earnings and profits.
• E) All of the above.

Identify and define the terms associated with options, such as strike price, premium, and in the money/out of the money.

Comprehend the impact of market conditions and option characteristics on the valuation and profitability of options.

Recognize the differences between call and put options in terms of rights and obligations.

Understand the effects of stock splits on option contracts.