Which of the Following Is Not a Consequence of the Double

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.