1. Consider a call option contract that lets you purchase 100 shares at $35. If there was a 9% stock dividend payment, how many shares can you buy under adjusted new option contract and what is the new strike price?
105 shares at $51.86
109 shares at $32.11
there is no effect
109 shares at $43.36
105 shares at $38.88
2. Which of the following statements is true regarding C Corporation dividend distributions?
a. the dividend distributions are taxed at the entity level
b. the dividend distributions are taxed at the individual shareholder level
c. the dividend distributions are not taxed because the income was already taxed at the entity level
d. the dividend distributions are taxed at the entity level and then taxed at the individual shareholder level