Suppose That the Pretax Holding-Period Returns on Two Stocks Are

question 39

Multiple Choice

Suppose that the pretax holding-period returns on two stocks are the same. Stock A has a high dividend payout policy and stock B has a low dividend payout policy. If you are a high-tax rate individual and do not intend to sell the stocks during the holding period, ________.

• A) stock A will have a higher after-tax holding-period return than stock B
• B) the after-tax holding period returns on stocks A and B will be the same
• C) stock B will have a higher after-tax holding-period return than stock A
• D) The answer cannot be determined from the information given.

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Definitions:

Political Socialization

The process through which individuals acquire their political beliefs and values, often influenced by family, education, and media.

Political Theory

The study of political ideas and concepts, including the nature of justice, the role of the state, and the rights and duties of citizens, often encompassing both normative and empirical analyses.

Liberal

A political and moral philosophy based on liberty, consent of the governed, and equality before the law.

Libertarian

Describes a political philosophy that emphasizes individual freedom, minimal government intervention in personal lives, and free-market capitalism.