The cost of internal common equity is already on an after-tax basis since dividends paid to common stockholders are not tax deductible.

Name: The cost of internal common equity is already on an after-tax basis since dividends paid to common stockholders are not tax deductible.
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Question

Quizplus · Accepted Answer

Dividends paid to common stockholders are paid out of after-tax profits and are not tax deductible, thus the cost of internal common equity is already on an after-tax basis.

The Cost of Internal Common Equity Is Already on an After-Tax