Unless exceeding the permissible limit governed by tax law, interest paid by a corporation is a tax deduction for the paying corporation, but dividends are not deductible. This treatment, other things held constant, would tend to increase the use of debt financing by corporations. True False
Unless exceeding the permissible limit governed by tax law, interest paid by a corporation is a tax deduction for the paying corporation, but dividends are not deductible. This treatment, other things held constant, would tend to increase the use of debt financing by corporations. True False
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Unless exceeding the permissible limit governed by tax law, interest paid by a corporation is a tax deduction for the paying corporation, but dividends are not deductible. This treatment, other things held constant, would tend to increase the use of debt financing by corporations.
True
False
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