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Billco Corporation expects earnings before interest and taxes to be $450,000 for the current tax year. Using the U.S. corporate flat tax rate of 21%,
Billco Corporation expects earnings before interest and taxes to be $450,000 for the current tax year. Using the U.S. corporate flat tax rate of 21%, compute the Billcos earnings available for common stockholders if the firm pays $25,000 in interest versus $25,000 in preferred stock dividends.
Answers:
A.) $371,000; $347,000
B.) $357,080; $357,080
C.) $335,750; $330,500
D.) $376,040; $352,040
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