Which of the Following Statements Is CORRECT

question 7

Multiple Choice

Which of the following statements is CORRECT?

• A) Since companies can deduct dividends paid but not interest paid,our tax system favors the use of equity financing over debt financing,and this causes companies' debt ratios to be lower than they would be if interest and dividends were both deductible.
• B) Interest paid to an individual is counted as income for federal tax purposes and taxed at the individual's regular tax rate,which in 2018 could go up to 37%,but qualified dividends received are taxed at a maximum rate of 15% for most individuals.
• C) The maximum federal tax rate on corporate income in 2018 was 50%.
• D) Corporations obtain capital for use in their operations by borrowing and by raising equity capital,either by selling new common stock or by retaining earnings.The cost of debt capital is the interest paid on the debt,and the cost of the equity is the dividends paid on the stock.Both of these costs are deductible from income when calculating income for tax purposes.
• E) The maximum federal tax rate on personal income in 2018 was 50%.

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Definitions:

Explicit Memories

Recollections that are able to be consciously retrieved, like specific details and occurrences.

Frontal Lobes

Brain regions associated with executive functions, such as decision-making, problem-solving, planning, and impulse control.

Basal Ganglia

A group of structures in the brain involved in processing information on movement and coordination, as well as aspects of learning and emotional response.

Iconic Memory

A type of visual sensory memory that temporarily stores an image that has been perceived visually.