Business, 07.11.2019 06:31 juan01sebastian00
Since 70 percent of preferred dividends received by a corporation is excluded from taxable income, the component cost of equity for a company which pays half of its earnings out as common dividends and half as preferred dividends should, theoretically, be
cost of equity = rs(0.30)(0.50) + rps(1 - t)(0.70)(0.50).
a. true
b. false
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Since 70 percent of preferred dividends received by a corporation is excluded from taxable income, t...
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