Which one of the following statements related to corporate dividends is correct?
A)Dividends are nontaxable income to shareholders.
B)Dividends reduce the taxable income of the corporation.
C)The Chief Executive Officer of a corporation is responsible for declaring dividends.
D)The Chief Financial Officer of a corporation determines the amount of dividend to be paid.
E)Corporate shareholders may receive a tax break on a portion of their dividend income.

Question

Quizplus · Accepted Answer

Corporate shareholders may receive a tax break on a portion of their dividend income. This is due to the fact that dividend income is usually taxed at a lower rate than other forms of income, such as wages or salary. However, the tax break on dividend income may vary depending on the individual's income level and tax bracket.

Which One of the Following Statements Related to Corporate Dividends