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

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

Quizplus · Accepted Answer

Dividends paid to ordinary shareholders are not tax-deductible, meaning they are paid out of post-tax profits, making the cost of ordinary equity already on an after-tax basis.

The Cost of Ordinary Equity Is Already on an After-Tax