The Cost of Preferred Stock to a Firm Must Be

question 71

True/False

The cost of preferred stock to a firm must be adjusted to an after-tax figure because 70% of dividends received by a corporation may be excluded from the receiving corporation's taxable income.

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Definitions:

Conditioned Response

A learned response to a previously neutral stimulus that becomes associated with an unconditioned stimulus.

Unconditioned Stimulus

In classical conditioning, a stimulus that naturally and automatically triggers a response without any need for prior learning.

Stimulus

An external or internal change that influences the activity of a living organism or one of its parts.

Operant Conditioning

A technique of instruction where the potency of a conduct is influenced by rewarding or discouraging it.