The Tax Cuts and Jobs Act of 2017

Multiple Choice

• left the rates on dividends and long-term capital gains the same, but increased the amount of income needed before the tax became effective.

• taxes short-term and long-term capital gains at the same rate.

• eliminated the tax rate on dividends to avoid double taxation.

• made high dividend paying stock less attractive to high income investors.

The "ex-dividend date" is the date

Multiple Choice

• on which recipients of the dividend are determined.

• the dividend is paid.

• the dividend is declared.

• which no longer includes dividend payments for stock bought on that date.

The Harsanyi Corp. is considering four investments. Which provides the highest after-tax return for Harsanyi Corp. if it is in the 21% federal tax bracket? Assume the tax rate on dividends is 15%.

Multiple Choice

• Treasury bonds at 5.0%

• Corporate bonds at 8.0%

• Municipal bonds at 5.0%

• Preferred stock at 6.0%