1. A Moving to another question will save this responseQuestion 2Dividend payements does not depend on the fimm's investment opportunities and at long nun, reveals a lot about the firm's equity valueO TrueO FalseMacBook Pro0OVRLakIDLIHCFOMAnd

Dividend policy means financial policies regarding company uses structure to dividend payout to…

A Moving to another quesbion will Save this respose. Question 2 Dividend payements does not depend on the firm's investment opportunities and at long run, reveals a lot about the firm's equity vaue O True O False

A Moving to another quesbion will Save this respose. Question 2 Dividend payements does not depend on the firm's investment opportunities and at long run, reveals a lot about the firm's equity vaue O True O False

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

8th Edition

ISBN:9781285065137

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter10: The Cost Of Capital

Section: Chapter Questions

Problem 2DQ

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Concept explainers

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

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