Biology Forums - Study Force

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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