ich of the following statements best describes the purpose of the dividend refund? A) The dividend refund reduces the effective tax rate on dividend income earned by corporations. B) The dividend refund allows corporations with a balance in their capital dividend account to reduce their tax payable by paying dividends. C) The dividend refund reduces the effective tax rate on dividend income earned by shareholders. D) The dividend refund allows corporations with a balance in their RDTOH accounts to reduce their tax payable by paying dividends.

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter15: Distributions To Shareholders: Dividends And Repurchases
Section: Chapter Questions
Problem 2Q: How would each of the following changes tend to affect aggregate payout ratios (that is, the average...
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Which of the following statements best describes the purpose of the dividend refund?

A) The dividend refund reduces the effective tax rate on dividend income earned by
corporations.
B) The dividend refund allows corporations with a balance in their capital dividend account to
reduce their tax payable by paying dividends.
C) The dividend refund reduces the effective tax rate on dividend income earned by
shareholders.
D) The dividend refund allows corporations with a balance in their RDTOH accounts to reduce
their tax payable by paying dividends.

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