In this problem what is the effect on the pref. stock dividend? Is there a percentage deduction on the basis of the amount prior to applying the tax rate?
"Corporation C has received $10,000 in interest from bonds purchased from other corporations and $10,000 in preferred dividends from another domestic corporation. If the corporation is in the 40 percent marginal tax rate, find the tax and after-tax amounts for the interest received and for the dividends received."