THE COST OF RETAINED EARNINGS: A FURTHER NOTE, AN ILLUSTRATION AND A COMPUTER PROGRAM

This paper presents the personal and corporate tax adjusted version of the cost of retained earnings, with particular reference to the problem of computing the effective rate of tax on a unit of pre tax profit when one allows for the delayed incidence of part of the tax impost. The argument is illustrated numerically and supported by a computer program which enables the user to consider and work out the effect of changing one or more variables. A term which appeared in a previous article (Lister 1981) is corrected.