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Why is interest expense said to cost the firm substantially less than the actual expense while dividends cost it 100 percent of the outlay?
Wiki User
∙ 15y ago
Due to the after tax cost of a tax-deductible expense can be computed as the actual expense times one minus the tax rate, because a dividend on common stock is not tax-deductible, we say it cost 100 percent of the amount paid. Shannon Coffey Wayne, MI
Wiki User
∙ 15y ago
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Why is interest exspense said to cost the firm substantially less than the actual expense while dividends cost it 100 percent of the outlay?
Due to the after tax cost of a tax-deductible expense can be computed as the actual expense times one minus the tax rate, because a dividend on common stock is not tax-deductible, we say it cost 100 percent of the amount paid. Shannon Coffey Wayne, MI
Little Books Inc recently reported 3 million in net income Its EBIT was 6 million and its tax rate was 40 percent What was its interest expense?
$1000000
5 million operating income net depreciation is 1 million interest expense of 1 million corporate tax rate is 40 percent what is the net income?
the remainders of money after a companies revenue is deducted
What is the journal entry if i received 10000 as a interest income and 10 percent percent advance income tax paid?
debit cash 9000debit tax 1000credit interest income 10000
Which method of estimating uncollectible receivables focuses on Uncollectible-account expense for the income statement?
The percent of sales method
Why is interest exspense said to cost the firm substantially less than the actual expense while dividends cost it 100 percent of the outlay?
Due to the after tax cost of a tax-deductible expense can be computed as the actual expense times one minus the tax rate, because a dividend on common stock is not tax-deductible, we say it cost 100 percent of the amount paid. Shannon Coffey Wayne, MI
What is the dividend received deduction?
If a company receives dividends from another company it is entitled to a deduction of 70 percent of the dividends that it receives. However, if the receiving company owns 20 percent or more then the deduction is 80 percent.
What is the term for a percent of the company's profit that is paid to the shareholders?
Dividends
Little Books Inc recently reported 3 million in net income Its EBIT was 6 million and its tax rate was 40 percent What was its interest expense?
$1000000
Is it better to have no debt or use 0 percent financing?
If you can pay off the debt IN FULL by the time the zero rate expires, then 0% is really an interest free loan, that frees up the rest of the cash you didn't use to earn interest or dividends. If you're not sure you can do that, pay up-front.
How much is 3 percent interest on 150000?
3 percent interest on 150000 is 4500.
What is 10 percent interest of 999?
Interest is 99.9
5 million operating income net depreciation is 1 million interest expense of 1 million corporate tax rate is 40 percent what is the net income?
the remainders of money after a companies revenue is deducted
How musch is an interest on a 2.5 billion dollar loan?
It depend on the interest of the loan some have a 0 percent interest all the way up to a 0.3 percent interest!
20000.00 loan for 50 days at 6 percent interest?
The answer is 1200.00 dollars in interest on that loan of 20000.00 for 50 days at 6 percent interest.
Investing 450.00 at 3.5 percent annual interest or 400.00 at 4.5 percent annual interest What is the difference in the amount of interest that could be earned?
2.25
Sales is 50000 variable expense 20000 fixed expense 20000 net income 10000 find net income if activity volume increases 10 percent percent?
$13000 or an increase of $3000.
