Which of the Following Forms of Earnings Distributions Would Not

question 18

Multiple Choice

Which of the following forms of earnings distributions would not be subject to double taxation at the corporate and shareholder level?

• A)Dividend
• B)Stock redemption
• C)Partial liquidation
• D)Compensation paid to a shareholder/employee of the corporation.

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Definitions:

Federal Reserve

The central banking system of the United States responsible for setting monetary policy, including the manipulation of interest rates to control inflation and stabilize the currency.

Deposits

Sums of money placed into financial institutions for safekeeping, which can earn interest over time depending on the type of account.

Minimum Tick Size

The smallest allowable increment by which the price of a financial instrument can move on the trading platform.

Treasury Bond Market

The marketplace where U.S. government bonds with maturities greater than ten years are issued and traded.