Which of the following statements is FALSE?
A. Shareholders typically must pay taxes on the dividends they receive. They must also pay capital gains taxes when they sell their shares.
B. Unlike with capital structure, taxes are not an important market imperfection that influence a firm's decision to pay dividends or repurchase shares.
C. Because long-term investors can defer the capital gains tax until they sell, there is still a tax advantage for share repurchases over dividends.
D. If dividends are taxed at a higher rate than capital gains, which has been true until the most recent change to the tax code, shareholders will prefer share repurchases to dividends.
Answer: B. Unlike with capital structure, taxes are not an important market imperfection that influence a firm's decision to pay dividends or repurchase shares.
You might also like to view...
Retrieval is very fast through data cubes because ________
A) data cubes use a separate server which is tuned for fast retrieval and reporting B) data cubes group data in logical dimensions, such as sales by product, city, region, and country C) data cubes represent information in the form of objects, using object-oriented programming languages to access them D) data cubes organize data by attaching XML tags to them
________ usually involve(s) the termination of an employee for criminal behavior, such as theft of company property, or for violating the company's policies, such as sharing confidential information with its competitors
A) Layoffs B) Furloughs C) Firing for cause D) Voluntary redundancy