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:

Covertly

Done in a hidden or secretive manner, often to avoid detection.

Authorities

Organizations or individuals vested with the power and legal right to command, decide, and enforce laws or directives.

Interrogations

The process of asking questions, often formally, to obtain information or a confession from suspects in a legal context.

Custody

The protective care or guardianship of someone or something, often referring to the legal guardianship of a child or the detention of suspects by law enforcement.