Under US Tax Law, Corporations Are Entities Separate and Distinct from from Their

question 10

True/False

Under U.S. tax law, corporations are entities separate and distinct from their shareholders.

---

Definitions:

Flotation Costs

The costs incurred by a company when issuing new securities, including underwriting fees, legal fees, and registration fees.

Selling Stock

The act of disposing of shares in a company, either privately or publicly, typically to raise capital or realize gains from investment appreciation.

Abnormal Returns

Returns on a security or portfolio that exceed the expected rate of return, not predicted by market models or theories.

Direct Expenses

Costs directly attributable to the production of a specific product or service, such as materials and labor.