Recent tax legislation reducing the individual tax on dividends has made C corporations more attractive than they were prior to the legislation.

Question

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The recent tax legislation has reduced the individual tax on dividends, making C corporations more attractive than they were prior to the legislation because they are subject to double taxation, meaning both the corporation and the individual shareholder have to pay taxes on their earnings. However, with the reduced individual tax on dividends, the overall tax burden on shareholders has decreased, making C corporations more appealing.

Recent Tax Legislation Reducing the Individual Tax on Dividends Has