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You would expect an increase in interest expense to______ the amount of taxes paid while an...

You would expect an increase in interest expense to______ the amount of taxes paid while an increase in dividends paid_________ the amount of taxes paid.

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Answer #1

You would expect an increase in interest expense to decrease the amount of taxes paid while an increase in dividends paid increase the amount of taxes paid.

Interest is tax deductable expense, so it will decrease the taxes while Dividend in appropriation of profits so Taxes will increase.

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