标题: Factor of (1-Tax Rate) [打印本页] 作者: jlg1982 时间: 2011-7-11 17:47 标题: Factor of (1-Tax Rate)
Hi,
I am having problems understanding (1-Tax Rate) factor when calculating dilutive EPS - debt and in other place used. Can anyone explain its significance.作者: Wasteoftime 时间: 2011-7-11 17:47
why isnt the same factor applied to common stock and preffered stock. Arent they taxed on gains
Edited 1 time(s). Last edit at Wednesday, May 12, 2010 at 09:19PM by bigspydee.作者: hariRaj 时间: 2011-7-11 17:47
We are talking about payments made to HOLDERS of stocks, preferred stock and debt.
Payments made to debtholders i.e. interest is recognized on the income statement so it lowers income before tax and provides the tax shield.
Payments made to ordinary and preferred shareholders i.e. dividends are not listed on the income statement; they're listed in the statement of changes to equity.
Bigspydee: You're thinking of investments in common and preferred stock, not issuance of these securities.
