Which of the following is an argument for the relevance of dividends? High dividends are a signal of financial strength. Personal taxes differ between income and capital gains. Some investors’ preference for current income. All of the above.

Which of the following is an argument for the relevance of dividends? High dividends are a signal of financial strength. Personal taxes differ between income and capital gains. Some investors’ preference for current income. All of the above.

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter4: Additional Income And The Qualified Business Income Deduction

Section: Chapter Questions

Problem 18MCQ

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Question

Which of the following is an argument for the relevance of dividends?

High dividends are a signal of financial strength.
Personal taxes differ between income and capital gains.
Some investors’ preference for current income.
All of the above.

Definition Definition Increase in the value of a capital asset and the amount that is realized when the asset is sold off. A capital gain may be short-term or long-term depending on the tenure for which the asset is held.

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