Suppose that dividend yield is 6%, depreciation is 12%, and the corporate tax rate is 35%. What

Question:

Suppose that yield is 6%, depreciation is 12%, and the corporate tax rate is 35%. What would be the marginal cost of each dollar of machinery investment under the following situations?
a. Firms are allowed to expense the machine.
b. There is an investment tax credit of 8%.
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...