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Company A and Company B are identical in all regards except that during Year 1 Company A borrowed $33,000 at an interest rate of 10%.

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Company A and Company B are identical in all regards except that during Year 1 Company A borrowed $33,000 at an interest rate of 10%. In contrast, Company B obtained financing by acquiring $33,000 from sale of common stock Company B agreed to pay a $3,300 cash dividend each year. Both companies are in a 30% tax bracket which company would show the greater retained earnings at the end of Year 1, and by what amount? Multiple Choice Company As retained earnings would be higher by $990 Company's retained earnings would be higher by $2.310. Both would show the same retained eaming Company As retained earnings would be higher by $3.300

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