单选题
Which of the following choices best describes the role of taxes on the after-tax cost of capital in the U. S. from the different capital sources? Common equity Preferred equity Debt ①A. No effect Decrease Decrease ②B. Decrease Decrease No effect ③C. No effect No effect Decrease
【正确答案】
C
【答案解析】In the U. S. , interest paid on corporate debt is tax deductible, so the after-tax cost of debt capital is less than the before-tax cost of debt capital. Dividend payments are not tax deductible, so taxes do not decrease the cost of common or preferred equity.