In dividend reinvestment plans, stockholders receive additional shares instead of cash dividends. Shareholders:
A) are not taxed at the time of the dividend because they received no cash.
B) must pay tax on the full value of the new shares at the time they are sold.
C) must pay tax in the year of the dividend on the value used to buy the new shares.
D) must pay tax on the dividend amount when the shares are sold.
C
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Indicate whether the statement is true or false