Which of the following statements regarding current U.S. tax laws is true?
A) Both dividend payments and interest payments are tax-deductible for a firm.
B) Only dividend payments are tax deductible; interest is never tax deductible.
C) Only dividend payments on preferred stock and interest payments on debt are tax-deductible for a firm.
D) Only interest payments are tax deductible; dividends are paid out of after-tax income.
Correct Answer:
Verified
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