Answer: e. repurchase shares
Explanation:
If the personal tax rates are lower than corporate tax rates then the company should engage in an activity that would put money into the pockets of shareholders such that they would take advantage of the lower personal tax rates.
The best way to do that would be a share repurchase. The company would probably buy at above market rates which would give shareholders capital gain and they wouldn't have to pay much taxes on it as personal rates are lower.
The deadweight loss from a tax per unit of good will be smallest in a market with inelastic supply and inelastic demand.
The Deadweight loss refers to loss that occurs when supply and demand are not in equilibrium and thus, result in market inefficiency.
Usually, the value of the deadweight loss varies with the demand elasticity and supply elasticity.
So, when the demand or supply is inelastic, the deadweight loss of the taxation will be smaller because the quantity bought or sold varies less with price.
Therefore, the answer is B. because the deadweight loss from a tax per unit of good will be smallest in a market with inelastic supply and inelastic demand.
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I think the answer would be A. It definitely would not be B or C and D seems kind of rude so I think that A. would be the most courteous and kind. Hope this is helpful for you! :)
Answer:
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Answer:
1. If a firm increases its dividend payout rate the: firm will have less cash available for new investment. True
2. Stock price will likely fall by the same percentage. False
3. Retention ratio will rise at the same rate. False
Explanation:
1. If a firm increases its dividend payout rate the: firm will have less cash available for new investment. This assertion is true because the company would be paying out a larger portion of earnings as dividends, hence the balance portion for new investment will be lower as a result.
2. Stock price will likely fall by the same percentage. This assertion is most unlikely because normally, if a particular stock is paying higher dividends investors will have high expectation and be willing to pay a higher price to buy a stock that pays high dividends
3. Retention ratio will rise at the same rate. This conclusion is also incorrect because pay out ratio and retention ratio have an inverse relationship. If more dividend is paid out, then less money is retained.
