"Double Taxation" Means

question 65

Multiple Choice

"Double taxation" means:

• A) If stockholders decide to sell their shares, they are subject to paying twice the amount of taxes on any capital gains.
• B) As the owner of the company, you pay twice the amount in employment taxes on yourself, as you do on your employees.
• C) Corporations pay taxes on their profits. If they distribute after-tax profits to the stockholders, the stockholders also pay taxes on the distribution.
• D) If the corporation doubles its profits from the previous year, the firm's tax rate (the percentage it pays in taxes) will also double.

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Definitions:

Earnings Per Share

A financial metric that represents the portion of a company's profit allocated to each outstanding share of common stock, indicating its profitability.

Dividend Yield

A ratio indicating the annual dividends a firm pays out compared to its stock price.

Return on Equity

A measure of financial performance that calculates the amount of net income returned as a percentage of shareholders' equity.

Net Profit Margin

A financial metric that shows the percentage of profit a company generates from its total revenue, indicating profitability efficiency.