Question
ABC Co.s marginal tax rate is 35%. It receives $3,000 interest income by investing in XYZ Co.s bonds, and $3,000 dividends by investing in 20%
ABC Co.s marginal tax rate is 35%. It receives $3,000 interest income by investing in XYZ Co.s bonds, and $3,000 dividends by investing in 20% of DEF Co.s equity. It also pays $3,000 interest to its creditors, and $3,000 dividends to its shareholders. ABCs after-tax interest income is ____; its aftertax dividend income is ____; its after-tax interest expense is ____; its after-tax dividend payment is ____. a. $3,000; $3,000; $3,000; $3,000 b. $1,950; $1,950; $1,950; $1,950 c. $1,950; $2,317.50; $1,950; $3,000 d. $1,950; $2,632.50; $1,950; $3,000
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