Assuming That the Corporation Has a 34% MTR,which of the Following

question 16

Multiple Choice

Assuming that the corporation has a 34% MTR,which of the following statements is true?

• A)Jacky,Inc.borrowed $500,000 and paid interest of $48,000; the after-tax cost of the interest was $31,680.
• B)Jacky,Inc issued 1,000 shares of 7%,$100 par preferred stock for $100,000.The after-tax cost of the $7,000 dividend paid was $4,620.
• C)Jacky,Inc issued 1,000 shares of 7%,$100 par preferred stock for $100.The after-tax cost of the $7,000 dividend paid was $2,380.
• D)Jacky,Inc.borrowed $500,000 and paid interest of $48,000; the after-tax cost of the interest was $16,320.

---

Definitions:

Units of X

A quantitative measure used to express the amount of a variable or entity X.

Price of X

Refers to the current market price of a specific good, service, or commodity.

Utility Function

A mathematical representation that ranks an individual's preferences over a set of goods or services, showing their relative satisfactions or levels of utility.

Bliss Point

A term in psychology and economics indicating the optimal level of consumption where any further increase would lead to dissatisfaction.