Neither the cost of issuing stock nor dividend payments is tax deductible, whereas interest payment on debt is deductible and therefore will lower a business's tax bill.

Question

Quizplus · Accepted Answer

This is because interest payments on debt are considered a business expense and can be deducted from the business's income for tax purposes, whereas the cost of issuing stock and dividend payments do not qualify as deductible expenses.

Neither the Cost of Issuing Stock nor Dividend Payments Is