"Plowback" Is a Preferred Source of Financing a Corporation Because

question 23

Multiple Choice

"Plowback" is a preferred source of financing a corporation because

• A)the funds are easier to obtain, compared to issuing stocks.
• B)it is not subject to double taxation.
• C)selling bonds involves the high cost of money.
• D)stock markets are subject to random walks.

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Definitions:

Dissociation

The process of a member withdrawing from a partnership or a member's interest being terminated, affecting the relationship between the members of a business entity.

Manager-Managed LLC

A limited liability company where the daily operations are overseen by appointed managers rather than all members.

LLC Members

Individuals or entities that own an interest in a limited liability company and have rights and responsibilities outlined in the LLC's operating agreement.

Limited Liability Company

A corporate framework that merges the direct tax benefits of partnerships or sole proprietorships with the protective limited liability features of a corporation.