The After-Tax Cost of Equity Is ________ the Pretax Cost

question 78

Multiple Choice

The after-tax cost of equity is ________ the pretax cost of equity.

• A)higher than
• B)lower than
• C)the same as
• D)none of the above

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Definitions:

Dividends

Payments made by a corporation to its shareholder members from its profits or reserves.

Debentures

A type of debt instrument that is not secured by physical assets or collateral but backed solely by the general creditworthiness and reputation of the issuer.

Indentures

Formal legal agreements, contracts, or documents, especially those that bind someone to work for another for a specified time, often used in the context of bonds or loans.

Corporate Stock Regulation

Rules and guidelines set by authorities governing the issuance, transfer, and trading of shares of a corporation.