Dividend exclusion for corporations receiving dividends

Assignment Help Financial Management
Reference no: EM13939356

The dividend exclusion for corporations receiving dividends from another corporation has resulted in a. stock investments being relatively less attractive, relative to bond investments made by one corporation in another corporation. b. stock investments being relatively more attractive relative to bond investments made by one corporation in another corporation. c. a lower cost of equity for the corporation paying the dividend d. a higher relative cost of bond financing for the corporation paying the dividend

Reference no: EM13939356

Questions Cloud

What is the present value of this buildings tax shields : A local engineering firm just bought a new office building (CCA=4%) for $500,000. Useful life of 30 years is expected with no salvage value. If tax rate is 40%, and required rate is 10%, then what is the present value of this building's tax shields?
Return on stockholders equity : Rogers Inc. had 600,000 shares of $2 par common stock outstanding at the end of both 2013 and 2014. Retained earnings at the end of 2013 amounted to $2,160,000. No dividends were paid during 2014, and net income for the year was $600,000. Determine R..
Determine the cash flows associated with different trucks : Steve is a contract carrier for the United States Postal Service. He has been hauling mail for nearly thirty years. His current contract is to haul mail between 20 cities in the eleven western states. Determine the cash flows associated with the diff..
What is the project discounted payback : Project K costs $70,000, its expected inflows are $16,000 per year for 8 years, and its WACC is 13%. What is the project's discounted payback?
Dividend exclusion for corporations receiving dividends : The dividend exclusion for corporations receiving dividends from another corporation has resulted in
What is best decision using net present value discount rate : As part of the company’s continues commitment to product innovation, the Executive Committee of PLE is debating whether to replace its original tractor model, the PLE-Classic, with a new model, the PLE-Tough, which would appeal to a younger clientele..
Security exchanges create efficient markets : security exchanges create efficient markets that do all of the following except
Adjustable gross income-federal income tax : A single young person had an adjustable gross income (AGI) of 68,000$ and allowable itemized deductions of 5,000$ in 2012. Compute the 2012 federal income tax:
What is after-tax cost of debt : Bedrick Co. Can borrow at an interest rate of 7.3% for a period of eight years. Its marginal federal-plus state tax rate is 40%. What is Bedrick's after-tax cost of debt? The company faces a tax rate of 40%. If the company wants to issue new debt, wh..

Reviews

Write a Review

Financial Management Questions & Answers

  What is the present value of that annuity if discount rate

You are considering preferred stock that pays a quarterly dividend of $1.50. If your desired return is 3% per quarter, how much would you be willing to pay? An investment will provide you with $100 at the end of each year for the next 10 years. What ..

  Some industries such as airlines rely heavily on debt

Why do you believe some industries such as airlines rely heavily on debt, while others such as computers do not?

  What after-tax rate of return will bank earn on the lease

If the bank depreciates the machinery on a straight-line basis over 20 years to a $0 estimated salvage value and has a 40 percent marginal tax rate, what after-tax rate of return will the bank earn on the lease?

  Earnings before interest and taxes and net income decrease

(leverage and EPS) You have developed the following pro forma income statement for your corporation: If sales should increase by 25 percent, by what percent would earnings before interest and taxes and net income increase. If sales decrease by 25 per..

  What is the percentage yield to call for bonds

Sealord Fisheries issues zero coupon bonds on the market at a price of $168.81 per bond. Each bond has a face value of $1,000 payable at maturity in 20 years. The bonds are callable in 6 years at a call price of $500. Using semi annual compounding, w..

  Values for a lump sum assuming annual compounding

Find the following values for a lump sum assuming annual compounding: The future value of $500 invested at 8 percent for one year The future value of $500 invested at 8 percent for five years The present value of $500 to be received in one year when ..

  What is the realized compound yield from the bond

You have just bought a 5 year 10% annual coupon bond with a par value of $1000 at a price of $963.04. Immediately after you bought the bond, the market interest rate changed to 8% per year. If the interest rate does not change from this level for the..

  Present the pros and cons or benefit analysis

Develop 3 proposals for your development strategy, which include outsourcing (buy), insourcing (make), or a combination of both. Present the pros and cons or benefit analysis for each of the 3 proposals

  Manufacturers representatives to an internal sales force

A manufacturer is considering a switch from manufacturers’ representatives to an internal sales force. The following cost estimates are available. Manufacturers’ reps are paid 8.8% commission and incur $655,000 in fixed costs; while an internal sales..

  Prepare a financial analysis for 2008 and 2009

I need to prepare a financial analysis for 2008 and 2009 for Under Armour - http://investor.underarmour.com/investors.cfm. The financial analysis should include:-Current ratio, Quick ratio, Net profit margin, Return on investment

  Mutual fund at the beginning of the year

You invested $105,000 in a mutual fund at the beginning of the year when the NAV was $48.63. At the end of the year the fund paid $.43 in short-term distributions and $.60 in long-term distributions. If the NAV of the fund at the end of the year was ..

  Fast-growing firm recently paid dividend

A fast-growing firm recently paid a dividend of $0.60 per share. The dividend is expected to increase at a 20 percent rate for the next four years. Afterwards, a more stable 12 percent growth rate can be assumed. If a 13.5 percent discount rate is ap..

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