The Cost of Preferred Stock to a Firm Must Be

question 25

True/False

The cost of preferred stock to a firm must be adjusted to an after-tax figure because 50% of dividends received by a corporation may be excluded from the receiving corporation's taxable income.

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Definitions:

Reward

A benefit, often monetary, offered as an incentive for the completion of a specific task or for providing valuable information.

General Public

The broad group of people who are not segmented by any particular category or classification.

Subjective Standard

A legal or evaluative criteria based on personal opinions, feelings, or perspectives, rather than objective, measurable factors.

Requisite Intent

The necessary state of mind or intention required by law for a person to be held legally responsible for his/her actions.