Which of the following statements is true of the impact of tax on the cost of capital of a firm??
A. ?All else being equal, an increase in the corporate tax rate results in a decrease in the weighted average cost of capital.
B. ?The before-tax cost of debt is the cheapest component of the cost of capital since the tax paid is a deductible expense.
C. ?The before-tax cost of debt is always less than the after-tax cost of debt of a firm.
D. ?The tax paid on dividends of preferred stock reduces the amount of funds that the firm can use for financing capital budgeting projects.
E. ?All else being equal, an increase in the equity capital that a firm raises by retaining earnings results in in the increase in the tax rate applicable to the firm.
Answer: A
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A liability would not include an obligation to
A) transfer assets. B) hire an employee. C) pay cash. D) provide services.
On July 9, Mifflin Company receives an $8,500, 90-day, 8% note from customer Payton Summers as payment on account. What entry should be made on the maturity date assuming the maker pays in full, and no adjusting entries have been made related to the note? (Use 360 days a year.)
A. Debit Cash $8,613; credit Interest Revenue $113; credit Notes Receivable $8,500. B. Debit Cash $8,628; credit Interest Revenue $128; credit Notes Receivable $8,500. C. Debit Notes Receivable $8,500; debit Interest Receivable $170; credit Sales $8,670. D. Debit Cash $8,670; credit Interest Revenue $170; credit Notes Receivable $8,500. E. Debit Cash $8,500; credit Notes Receivable $8,500.
Use the information in Table 10.6. What is the minimum number of tutors required if preference is given to the pair S-SU in case of a tie in the selection off days?
A) fewer than seven B) seven C) eight D) nine
Losses on sales of property between a taxpayer and his/her siblings are disallowed.
Answer the following statement true (T) or false (F)