1. An important difference between interest paid by a corporation and dividends paid for a corporation is that:
a. Interest paid is tax-deductible, while dividends paid are not.
b. Dividends paid are tax-deductible, while interest paid is not.
c. Long-term interest is tax-deductible, while dividends paid and short-term interest paid are not.
d. Corporations rarely pay dividends, while they frequently pay interest.
2. This is the amount of additional taxes a firm must pay out for every additional dollar of taxable income it earns.
a. progressive tax system
b. average tax rate
c. earnings before tax
d. marginal tax rate