Recall Barston Mining from Example 17.2. Suppose Barston must pay corporate taxes at a 25% rate on
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Recall Barston Mining from Example 17.2. Suppose Barston must pay corporate taxes at a 25% rate on the interest it will earn from the one-year Treasury bill paying 2% interest. Would pension fund investors (who do not pay taxes on their investment income) prefer that Barston use its excess cash to pay the \($100,000\) dividend immediately or retain the cash for one year?
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PLAN As in the original example the comparison is between what shareholders could generate on their ...View the full answer
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Related Book For 
Fundamentals Of Corporate Finance
ISBN: 9780137852581
6th Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
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