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Which source of investor income is susceptible to double taxation? Interest earned Dividends Suppose a firm in the 40% federal-plus-state tax bracket needs to pay $1 in dividends to its shareholders. What is the pretax income it should have to poy this dividend? $1.67 $1,00 Bive Hamster Manufacturing owns 192,500 shares in the Biack Sheep Broadcasting Company. If Black Sheep Broadcasting has 250,000 shares of coenmen steck oututandeng, con Blue Hamster file a single income tax return that reports the incomes and expenses of both companies? No, becaute Blue Hamster Manufacturing's ownership stake in Bisck Sheep Breadeasting is less than or equal to 40%. whereas 50% or more is required by the U.S. Tax Codn. No, because elve Kamster Manufacturing's ewnership sake in Buck Sheep eroadcasting is less than or equal to 79%, whereas 80% or more is required by the U.S. Tax Code. Yes, because Blue Hamster Manufacturing s ownership stake in Black Sheep Broadcasting is greater than or equal to som, as required by the U.S. Tax Code. The Internal Revenue Service prohibits the imprope: of dividends, which reters to a corporation's retenton of undistributed profits to assist shareholders in avoiding their personal inco ads. The IRS imposes a penalty if corporstions accumulate more than Suppose you want to inwest $10,000. You have two oporm. The internal Revenue Service prohibits the improper of dividends, which refers to a corporation's retention of undistributed profits to assist sharehoiders in avoiding their personal income tax on dividends. The IRS imposes a penalty if corporations accumulate more than int to invest $10,000. You have two options: I: Invest in municlpal bonds with an expected return of 10.00%, or Option =2 : Invest in the corporate bonds of Jefferson \&. Alexander 1ne. which are offering an expected return of 12.50% Assume that your decision is based solely on your tax situation. If everything else is the same for both bonds, at what tax rate would you be indifferent between these two bond investments? 18.60% 25.60% 20.00% 22.00% For your personal portfolie, you purchased 1,000 shares of a foreign manufacturing company for $39,00 per share and sold it for $74,00 per share after three years. How will your gain or loss be treated when you file your taxes? As a capital gain that will be taxed at the current ordinary income tax rate As a capital gain that will be taxed at the capltal gains tax rate

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