Corporations that do not issue financial securities such as stock or debt obligations:
A) will not be able to increase sales.
B) cannot be profitable
C) generate sufficient funds to fulfill their needs
D) do not face double taxation of thier profits
I read and read and I think the answer is D. Does anyone else have an explanation?
the answer is C. i previously had help on that question
To determine the correct answer, let's break down the question and evaluate each option.
A) Corporations that do not issue financial securities such as stock or debt obligations will not be able to increase sales.
This statement is not necessarily true. While issuing financial securities like stocks or debt obligations can be one way for corporations to raise funds to expand their operations and increase sales, it's not the only method available. Companies can also secure loans from financial institutions or generate internal funds through profits to invest in sales expansion.
B) Corporations that do not issue financial securities such as stock or debt obligations cannot be profitable.
Again, this statement is not universally true. Profitability depends on various factors such as the company's business model, revenue generation, and cost management. While issuing financial securities can provide additional capital for growth, it is not the sole determinant of a company's profitability.
C) Corporations that do not issue financial securities such as stock or debt obligations generate sufficient funds to fulfill their needs.
This statement is more in line with the characteristics of companies that do not issue financial securities. If a corporation does not issue stocks or debt obligations, it generally aims to generate internal funds from its operations to meet its financial requirements, such as financing investments, managing operational expenses, or fulfilling debt service obligations.
D) Corporations that do not issue financial securities such as stock or debt obligations do not face double taxation of their profits.
This statement is true. One of the advantages of not issuing financial securities is the avoidance of double taxation. Double taxation occurs when corporate profits are taxed at both the corporate level and again when distributed to shareholders as dividends. By not issuing securities, a corporation can avoid this double taxation scenario.
Based on the explanations provided, the correct answer to the question is D) corporations that do not issue financial securities such as stock or debt obligations do not face double taxation of their profits.