Essay
Assume that all earnings are paid out as dividends.Now consider the fact that Louis must pay personal tax on the firm's cash flow.Louis pays taxes on interest at a rate of 33%,but pays taxes on dividends at a rate of 28%.Calculate the total cash flow to Louis after he pays personal taxes.(Challenge problem; covered in text problems 9 and 10)
Correct Answer:
Verified
Correct Answer:
Verified
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