Is the cost of equity calculated from the CAPM model, pre -tax or post-tax?

1 answer:

3 0

The existence of pre-tax cost of debt and post-tax cost of debt is due to the acknoledgement of the tax benefit from issuing debt.There is no tax benefit from paying divdends,so it makes no sense talking about pre-tax,post-tax cost of equity for a firm.When you think about cash flow to equity you can only assume that the taxes owed by the company have already been paid.Now, the taxation over the income of the shareholder is a whole different issue that does not take place in this discussion,since it is not taken in consideration either in cost of equity or cost of debt.

You might be interested in

Which of the following options to buy a health insurance plan is BEST if you want to get savings on monthly premiums and other c

Paha777 [63]

Answer:

The correct answer is letter "E": Enrolling in a marketplace plan.

Explanation:

Health insurance Marketplace is a service managed by the government that allows individuals, families, and small businesses to find affordable health care insurances. This service aims for everybody to have a health insurance plan regardless of their income.

6 0

2 years ago

Devin wants to purchase DEF stock for a specified price of $40.00 or less, and he understands this request will be executed afte

Lemur [1.5K]

Answer:

He should use a limit order.

Explanation:

Limit order is given to a broker to buy a stock at a specified price or a price that is better that the specified price. Here Debin order will be executed at a price $40 or below when he places a limit order .

Therefore, He should use a limit order.

3 0

3 years ago

If a population consists of the positive even numbers through 30 aqnd if A= (2,6,12,24), what is A?

blondinia [14]

Um im sorry i tried idk

5 0

3 years ago

Which action will be least helpful if you’ve been the victim of identity theft?

lina2011 [118]

<u>Ordering your latest credit report</u> is the action that appeared to be the least helpful if you’ve been the victim of identity theft. Therefore, <u>the correct answer is D. </u>

If anyone has been a victim of identity theft, then it is important for such a person to officially report or contact any of the credit reporting companies to place a fraud alert on their credit report.

<h2>Further Explanation</h2>

Identity theft is when someone intentionally steals your information and uses such information without taking your permission. In the US, identity theft has become a booming business for fraudsters

In the US, 15.4 million Americans were a victim of theft, also identity theft tops complain of the consumer to the Federal trade commission. Regardless of how careful you seem to be, you can still fall victim to identity theft.

If you are a victim of identity theft, there are things you do immediately.

Some of the steps you can take to prevent an identity thief to further commit fraud with your details include

Report any issues concerning identity theft to the federal trade commission (FTC)
Ensure you clean up your entire account
Immediately contact the credit Report Company and officially place a fraud alert
In case of Tax-related identity theft, report to the IRS
Place a block on your credit report
Contact the company or the backs where the fraud occurred.

LEARN MORE:

Which action will be least helpful if you've been the victim of identity theft brainly.com/question/1359436
Which action will be least helpful if you’ve been the victim of identity theft brainly.com/question/3968427

KEYWORDS:

victim
identity theft
irs
fraud
companies
account

5 0

3 years ago

Read 2 more answers

5. Almost 30% of drivers between the ages of 15 and 20 who were killed in a motor vehicle crashes had been drinking. A. True B.

Vladimir [108]

I believe the answer is true

4 0

3 years ago