What type of agency cost is this provision

Assignment Help Finance Basics
Reference no: EM131288908

1 .If a manager signs a contract with a strict provision prohibiting the manager from competing against this company if the manager leaves the company, what type of agency cost is this provision?

2 .The U.S. tax code allows the creation of a taxable entity known as an S corporation. According to the Internal Revenue Service (www.irs.gov/businesses/small/article/0,,id=98263,00.html):
S corporations are corporations that elect to pass corporate income, losses, deductions and credit through to their shareholders for federal tax purposes. Shareholders of S corporations report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates. This allows S corporations to avoid double taxation on the corporate income. S corporations are responsible for tax on certain built-in gains and passive income. Corporations that do not elect to be treated as S corporations are called C corporations.

a. How does income get taxed twice in the case of a C corporation?

b. The shareholders of an S corporation are still entitled to limited liability in the case of bankruptcy of the corporation. What are the advantages of being an S corporation if an entity can qualify to do so?

Reference no: EM131288908

Questions Cloud

How many n box cars must honda sell to break even : If the unit variable cost for each N Box is $14,000 and Honda has fixed costs totaling $20 million for this car, how many N Box cars must Honda sell to break even? How many must it sell to realize a profit margin similar to that of the Smart car?
Build or buy and service-level agreements : Suppose, as a Chief Information Officer (CIO), you were asked to provide the organization with time-entry system for the employees. Examine the options to insource or outsource the system to be developed.
How are your two philosophers coming along : How are your two philosophers coming along? Take time to finalize your search for the two and write your faculty member a paragraph in which you announce their names and the one area of political thought for comparison.
Discuss the ethical issues surrounding orphan drugs : Discuss the ethical issues surrounding orphan drugs. Should pharmaceutical companies be allowed to charge such high prices for these drugs?
What type of agency cost is this provision : If a manager signs a contract with a strict provision prohibiting the manager from competing against this company if the manager leaves the company, what type of agency cost is this provision?
Suggest an app for another tangible product : In what stage of the product life cycle is the Reading Rainbow television program? Has the mobile app changed that? Explain.
What is the best point estimate for the population mean : What are confidence intervals? What is a point estimate? What is the best point estimate for the population mean? Explain. Why do we need confidence intervals?
Determine how the 4 ps have been balanced : Develop a presentation illustrating the launch and progress of a new consumer product in your own country or region in the past five years. Focus on how the business has used the 4 P's.
What role does the widow um nuwayyir play for the girls : When she discovers her husband's secrets, Gamrah desperately attempts to hold her marriage together. Do you think she is a victim of circumstance or is she guilty of dishonesty in her own right?

Reviews

Write a Review

 

Finance Basics Questions & Answers

  Trevor price bought 10-year bonds issued by harvest foods

trevor price bought 10-year bonds issued by harvest foods five years ago for 942.69. the bonds make semiannual coupon

  Decade in achieving the goals of congressional mandate

Submissions should be a minimum of 500 words and sources must be documented. You should use you own words and should not just "copy and paste" responses from Internet sources.

  What would the cost of equity from new stock be

If the company were to issue new stock, it would incur a 14% flotation cost. What would the cost of equity from new stock be? Round your answer to two decimal places.

  Oil filters are consumed by a garage at fairly steady rate

Oil filters are consumed by a garage at fairly steady rate of 100 per week. The filters cost the garage $15 per unit and it cost the garage $50 per order. Holding cost is 25% of the unit cost. Please determine the following:Determine the optimal numb..

  Explain why stock buybacks are similar to dividends from

the purchase of treasury stock commonly called stock buybacks is being done with increasing frequency in lieu of

  Compute the value of the firm

Compute (i) the value of the firm, (ii) the price per share, and (iii) the number of shares outstanding after the capital structure change.

  What is the yield to call

What is the yield to call, if they are called in 5 years? Round your answer to two decimal places.

  What is the unlevered value of the firm

The company is in the process of issuing $2 million of bonds at par that carry a 5% annual coupon. What is the unlevered value of the firm (in millions)? (Note: You should use MM capital structure model with corporate taxes, but without personal t..

  What is the least that each of the bonds is worth today

What is the least that each of the bonds is worth today? Comment on the function of the bond valuation procedure for convertibles.

  N the income statement grow proportionally with sales?

If smith pays out 25% of their projected net income as dividends, what will be the company's addition to retained earnings. If sales grow by 25% and all items on the income statement grow proportionally with sales?

  Explain why the central banks intervention caused

Explain why the central bank's intervention caused such panic among currency futures traders with buy positions. Explain why the floor broker's willingness to sell 300 pound futures contracts at the going market rate aroused such concern. What might ..

  Which company had higher operating leverage

PepsiCo's operating income was $8.04 billion in 2009 and $6.96 billion in 2008. Based on these figures, which company had higher operating leverage?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd