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    Principles of Corporate Finance Study Set 4
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    Exam 2: Financial Statements, Cash Flows, and Taxes
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    Dividends Paid to a Canadian Corporation by a Canadian Corporation
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Dividends Paid to a Canadian Corporation by a Canadian Corporation

Question 122

Question 122

Multiple Choice

Dividends paid to a Canadian corporation by a Canadian corporation are


A) taxed as ordinary income.
B) exempt from tax.
C) taxed at 50% of the marginal tax rate.
D) grossed up by 25% before calculating taxes and the dividend tax credit.

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