Which of the Following Statements Regarding Debt and Equity Financing

question 3

Multiple Choice

Which of the following statements regarding debt and equity financing is FALSE?

• A)Dividend payments on equity financing are deductible by the corporation for tax purposes.
• B)Dividends are paid from after-tax corporate income.
• C)Interest income from debt financing is taxable in the hands of the investor.
• D)Interest payments on debt financing are deductible by the corporation for tax purposes.

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