Which of the Following Is Not a Consequence of the Double

question 150

Multiple Choice

Which of the following is not a consequence of the double tax on dividends?

• A) Corporations have an incentive to retain earnings and structure distributions to avoid dividend treatment.
• B) Corporations have an incentive to invest in noncorporate rather than corporate businesses.
• C) The cost of capital for corporate investments is increased.
• D) Corporations have an incentive to finance operations with debt rather than equity.
• E) All of the above are consequences of the double tax on dividends.

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Definitions:

Monthly Salary

Regular payment from an employer to an employee, typically spread over a month, for performing agreed-upon professional tasks.

Commission

A fee or percentage of a transaction value paid to agents or employees for conducting a piece of business or a service.

Sales

The exchange of goods or services for money, representing the primary source of revenue for most businesses.

Commission Only

A payment model where compensation is based solely on the amount of sales or transactions generated, with no base salary.