- CFA Exams
- CFA Level I Exam
- Topic 4. Financial Statement Analysis
- Learning Module 9. Analysis of Income Taxes
- Subject 5. Corporate Income Tax Rates
CFA Practice Question
Which tax rate is more relevant for assessing a corporation's tax burden?
B. Effective tax rate
C. Cash tax rate
A. Statutory tax rate
B. Effective tax rate
C. Cash tax rate
Correct Answer: B
It is calculated by dividing the corporation's tax liability by its taxable income.
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