Problem
1. Which is the more relevant tax rate-the marginal or the average-in determining the form of organization for a new firm? Discuss aspects of the tax laws that make the form of organization less important.
2. For tax purposes, how does the treatment of interest expense compare with the treatment of common stock dividends from each of the following standpoints: a firm paying the interest or dividend, an individual recipient, and a corporate recipient?
3. Why is personal income tax information important to the study of business finance?