Dividends receive preferential treatment when they become corporate income.
Investing in equity, investors will receive two streams of money: dividends and capital gain. Dividends might be retained in the business for new expansion in the future.
Answer and Explanation:
The answer is FALSE.
The dividends paid to a corporation will be treated as an ordinary income and taxed at the current corporate tax bracket.
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from Finance 101: Principles of FinanceChapter 16 / Lesson 1