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QUESTION 25 o Which of the following is NOT an advantage of stock repurchases? Income received is capital gains rather than higher-taxed dividends. Stockholders may

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QUESTION 25 o Which of the following is NOT an advantage of stock repurchases? Income received is capital gains rather than higher-taxed dividends. Stockholders may take as a positive signal - management thinks stock is undervalued Helps avoid setting a high dividend that cannot be maintained. Repurchases may be interpreted by stockholders to predict poor investment opportunities. Stockholders can choose to sell or not. QUESTION 26 Which of the following is NOT stated in the lecture notes supporting the tax effect theory and favoring low dividends? If a stock is held until the owner dies, capital gains taxes must be paid in full. Long term capital gains are taxed at a maximum rate of 23.8%, whereas dividends are taxed at rates up to 43.4%. Taxes are not paid on capital gains until the stock is sold. None of these choices are mentioned in the lecture notes supporting this theory. All of these choices are mentioned in the lecture notes supporting this theory

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