A corporation has $10,000,000 of 10 percent preferred stock outstandin
A corporation has $10,000,000 of 10 percent preferred stock outstanding and a 40 percent tax rate. The amount of earnings before interest and taxes (EBIT) required to pay the preferred dividends is ________.
A) $1,000,000
B) $400,000
C) $600,000
D) $1,666,667
ANSWER
D
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