Which of the Following Items Are Not Included in the GAAP

question 40

Multiple Choice

Which of the following items are not included in the GAAP financial statement income tax footnote's effective tax rate reconciliation?

• A)Hypothetical tax on book income at U.S. Federal corporate tax rate.
• B)Total tax expense per the GAAP financial statements.
• C)Tax effect of temporary differences.
• D)Tax effect of permanent differences.

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Definitions:

Cost of Equity

The theoretical disbursement a firm makes to its equity stakeholders as remuneration for the risk they bear by putting their capital into the business.

Dividend Growth Model

A valuation model that estimates the price of a company's stock based on the expected dividends and their growth rate.

After-tax Cost

The cost of an investment or expense after the effects of income tax have been taken into account.

Required Return

The minimum return that investors expect or require from an investment to compensate for its risk.