hariRaj

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.