1. Interest versus Dividend Expense Longview Products Company (LPC) expects earnings before interest and taxes of $500,000...

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1. Interest versus Dividend Expense

Longview Products Company (LPC) expects earnings before interest and taxes of $500,000 for

this year. Under the new tax law, LPC is subject to a 21% flat tax. Compute the firm's earnings

after taxes and earnings available for common stockholders (earnings after taxes and preferred

stock dividends, if any) under the following scenarios:

a. LPC pays $80,000 in interest expense.

b. LPC pays $80,000 in preferred stock dividends

Posted Date: May 20, 2024 02:07 AM

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1. Interest versus Dividend Expense Longview Products Company (LPC) expects earnings before interest and taxes of $500,000...

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