Teconica Co

question 70

Multiple Choice

Teconica Co.is offering shareholders a choice between a $1.00 dividend and the opportunity to sell the share back to the company for $20 per share.Imogen owns 1000 shares, purchased at $20 per share, and wonders if there is any difference between taking the dividend for $1000 and selling 50 shares at $20 per share.She would have to pay a 15% tax on either capital gains or dividends.

• A)By selling back the 50 shares, she will avoid taxes, but her remaining shares will be less valuable than if she chose the cash dividend.
• B)She will have the same amount of cash under either alternative.
• C)After taxes, she will have $200 more if she takes the cash dividend.
• D)After taxes, she will have $200 more if she chooses to sell the 50 shares.

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Definitions:

Factorial Research Design

An experimental setup that involves manipulation of two or more independent variables to observe their effect on the dependent variables.

Main Effects

The direct impact of each independent variable on the dependent variable in an experiment.

SSB

Sum of Squares Between groups, a measure used in statistical analysis to quantify the variance among different groups.

SSA

SSA stands for Social Security Administration, a U.S. government agency that administers social security, a social insurance program consisting of retirement, disability, and survivors' benefits.