Which of the Following Is a Disadvantage of a C

question 16

Multiple Choice

Which of the following is a disadvantage of a C Corporation?

• A) Income is subject to double taxation.
• B) limited liability
• C) Raising capital is easier than a partnership or sole proprietorship.
• D) Stock is liquid if traded on a major stock exchange.
• E) No restrictions exist on the number of shareholders.

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Definitions:

Efficient Level

The efficient level refers to the optimal point of production or service provision where the cost of resources is minimized and the satisfaction or benefit to consumers is maximized.

Impose a Tax

The act of a government or authority setting a financial charge or levy upon a taxpayer.

Maximizing Profits

A company's goal to achieve the highest possible return or profit from its operations, often through efficient resource use and strategic planning.

Marginal Social Cost

The comprehensive expense encountered by society to produce one more unit of a good or service, encompassing private expenses as well as any extraneous costs.