Calculate the after tax cost of interest on the loan

Reference no: EM132177141

Question - An issuing (financing, paying) corporation. Annual interest paid on the loan =$200, b) preferred stock dividend paid = $500, c) common stock dividend paid= $800, The marginal corporate tax rate is 40% for the issuing corporation.

A) Calculate the after tax cost of 1) interest on the loan, 2) Pref. stock dividend, and 3) Common Stock Dividend to the issuing corporation.

B) Calculate the 1) taxable income, and 2) tax liability of the above to a receiving corporation, the tax rate is 35%.

C) Calculate the 1) taxable income, and 2) tax liability of the above to an individual if the marginal tax rate is 32%.

Reference no: EM132177141

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