Which of the following most accurately describes the impact of taxes when investing in stocks?

Taxes will be paid only on dividends paid, effectively lowering the dividend yield of the stock

Taxes will be paid on both dividends and the sale of the stock

Taxes will be paid only when the stock is sold, because dividends are tax-free

There is no impact, stocks are always a tax-free investment

Taxes are paid on both dividends and sale of the stock, but only to the extent your return exceeds the risk-free rate