Since 70% of the Preferred Dividends Received by a Corporation

question 22

True/False

Since 70% of the preferred dividends received by a corporation are excluded from taxable income,the component cost of equity for a company that pays half of its earnings out as common dividends and half as preferred dividends should,theoretically,be
Cost of equity = r_s(0.30)(0.50)+ r_ps(1 − T)(0.70)(0.50).

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Definitions:

Facial Expressions

Visible changes in the face that convey an individual's emotions to others, including happiness, sadness, anger, and fear.

Deaf and Blind

Refers to the condition in which an individual is unable to hear and see to a significant extent.

Duchenne Smile

A genuine smile that involves contraction of both the zygomatic major muscle (raising the corners of the mouth) and the orbicularis oculi muscle (raising the cheeks and forming crow's feet around the eyes).

Voluntary Smile

A smile that is intentionally produced to communicate happiness, politeness, or social engagement, as opposed to a spontaneous emotional response.