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Why would a corporation rather borrow money and pay interest than sell stock and then pay dividends?
Wiki User
∙ 12y ago
Interest is tax deductible, so amounts paid lower the tax they would have otherwise paid.
Dividends are paid with after tax earnings..there is no tax deduction for them.
Of course, someone receiving interest pays tax on it at their ordinary income rate, and someone receiving dividends pays tax at the capital gain rate, which is lower.
Wiki User
∙ 12y ago
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What is the definition of reinvestment?
ReinvestmentUsing dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash.Viper1
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Would you rather have a savings account that offered simple interest or an account that offered compound interest?
account and i just want points so yeh
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What is the definition of reinvestment?
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What is earning deficit?
In accounting, retained earnings refers to the portion of net income which is retained by the corporation rather than distributed to its owners as dividends. Similarly, if the corporation takes a loss, then that loss is retained and called variously retained losses, accumulated losses or accumulated deficit. Retained earnings and losses are cumulative from year to year with losses offsetting earnings.
What is a method by which the Federal Reserve encourages or discourages bank loans?
One of the method of discourage bank loans (and msot commonly used) is to influence the interest rate. With a high interest rate, people are more inclined to save rather than borrow (due to high return.)
Why is it important in a public corporation rather than in a private corporation?
yes you are right
What is retained earnings deficit?
In accounting, retained earnings refers to the portion of net income which is retained by the corporation rather than distributed to its owners as dividends. Similarly, if the corporation takes a loss, then that loss is retained and called variously retained losses, accumulated losses or accumulated deficit. Retained earnings and losses are cumulative from year to year with losses offsetting earnings.
Is monsanto the antichrist?
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It is owned by a single person. Rather than a corporation.
Would you rather be an entrepreneur or a manager in a big corporation?
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If I borrow 20000 for 5 years what is the payment?
That would depend on the interest rate you got at the time of negotiating the loan. You don't say what the loan is for, but if it is for a car, try and negotiate your own loan with a bank, rather than go through the auto place's financing company. You'll get a better deal.
