Question

True or False for all (PLEASE REPLY ASAP)!!!!!!!!

1.) Double taxation of income refers to companies having to pay both Federal and State income tax.

2.) FOMC stands for Federal Operations of Markets Commission, and is not part of the Federal Reserve.

3.) If a company uses a stock split, the owners of common stock lose money because the stock is now worth less.

4.) If management operates in a manner designed to maximize the firm's expected profits for the current year, this will also maximize the stockholders' wealth as of the current year.

5.) If people lost faith in the U.S. Financial markets the standard of living would fall. This would happen because the markets could not operate as efficiently without the faith of investors.

Answer 1

1: False

Double taxation refers to taxing the same income twice for example first income of a company is taxed and then dividend is taxed in the hands of investors.

2: False

FOMC is Federal Open Market committee

3: False

The price does decrease but since the number increases, the investor does not lose money.

4: False

The increase in income will not necessarily increase the stock price. The stock price depends upon future cash flows of the company.

5: True

The market movements depend upon the investor expectations.