Taxes affect many financial decisions. Explain how (a) Interest and dividend payments are treated for tax purposes,
Question:
(a) Interest and dividend payments are treated for tax purposes, from both a company’s, and an investor’s perspective, and
(b) How dividends and capital gains are treated for tax purposes by individuals. In your answers, explain how these tax treatments influence corporation’s and investors’ behavior.
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Step by Step Answer:
a Interest is deductible to the corporate payer but dividend payments are not deductible This leads ...View the full answer
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