9. If both dividends and capital gains are taxed at the same ordinary income tax rate, some difference in the tax effect still exists because:

• Dividends are immediately taxed while capital gains are deferred until the stock is sold.
• Capital gains are immediately taxed while dividends are deferred until the stock is sold.
• Both dividends and capital gains are theoretically taxed every year but in practice, capital gains are rarely taxed.
• There is no difference: both dividends and capital gains are taxed every year.