Which of the Following Is NOT a Result of the Double

question 101

Multiple Choice

Which of the following is NOT a result of the double taxation of dividends?

• A) Because profits that firms distribute to stockholders are taxed a second time, firms have an incentive to retain profits rather than to distribute them to stockholders.
• B) The return investors receive from buying stocks is reduced, which reduces the incentive people have to save in the form of stock investments and increases the costs to firms of raising funds.
• C) It gives firms an incentive to take on what may be an excessive level of debt rather than issue stock.
• D) The decline in retained profits results in increased inefficiency.

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Definitions:

Perception

The process by which individuals organize and interpret their sensory impressions to give meaning to their environment.

Transduction

A process by which sensory receptors change physical stimuli into signals that are eventually sent to the brain.

Thalamus

A crucial brain structure acting as a relay station for information between the cerebral cortex and the rest of the body.

Hypothalamus

A region of the brain that controls an immense number of bodily functions including emotions, autonomic functions, and hormone production.