Recovery of capital (ROC)results in:

Name: Recovery of capital (ROC)results in:
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Recovery of capital (ROC) refers to the return of a portion of the investor's original investment, which reduces the cost basis of the acquired stock. This means that the investor's effective purchase price for the stock is reduced, resulting in a lower tax liability when the stock is sold. It does not directly result in an increase in dividend or stock value, nor does it reduce losses on the stock.

Recovery of Capital (ROC)results In