ow would each of the following changes tend to affect the average dividend payout ratios for corporations, other things held constant? Explain your answers. a.An increase in the personal income tax rate that is applied to dividends. b.A rise in interest rates. c.A decline in corporate investment opportunities. d.Permission for corporations to deduct dividends for tax purposes as they now can do with interest charges
ow would each of the following changes tend to affect the average dividend payout ratios for corporations, other things held constant? Explain your answers. a.An increase in the personal income tax rate that is applied to dividends. b.A rise in interest rates. c.A decline in corporate investment opportunities. d.Permission for corporations to deduct dividends for tax purposes as they now can do with interest charges
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter1: Introduction And Goals Of The Firm
Section: Chapter Questions
Problem 8E
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How would each of the following changes tend to affect the average dividend payout ratios for corporations, other things held constant? Explain your answers.
a.An increase in the personal income tax rate that is applied to dividends.
b.A rise in interest rates.
c.A decline in corporate investment opportunities.
d.Permission for corporations to deduct dividends for tax purposes as they now can do with interest charges
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explain how changes in each of the following would affect AFN, holding other things constant: the growth rate, the amount of accounts payable, the profit margin, and the payout ratio.
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