Interest versus dividend expense

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Interest versus dividend expense - Michaels Corp. expecst earnings befor inters and taxes to be $50,000 for the current period. Asuuming an ordinarytax rate of 15%, compute the firm's earnings after taxes and earnings available for common stockholders (earnings after taxes and preferred stock dividends, if any) under the following conditions:

a) the firm pays $12,000 in interest

b) the firm pays $12,000 in preferred stock dividends

Reference no: EM131179096

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