How might the expected future reappearance of higher tax

Assignment Help Finance Basics
Reference no: EM131132028

How might the expected future reappearance of higher tax rates on individuals receiving dividends affect corporate dividend payout policies?

In 1980, the percentage of firms paying monthly, quarterly, semi-annul, or annual dividends stood at 60 percent By the end of 2002, this percentage had declined to 20 percent In May 2003, President George W. Bush signed into law the Jobs and Growth Tax Relief Recon dilation Act of 2003 (JGTRRA). Porto that new law, dividends were taxed once as part of corporate earnings, and again as the personal income of the investor, in both cases with a potential top rate of 35 percent The result was an effective tax rate of 57.75 percent on some dividends. Though the 2003 tax law did not completely eliminate the double taxation of dividends, it reduced the maximum possible effect of the double taxation of dividends to 44.75 percent. For taxpayers in the lower tax brackets, the combined effect was a maximum of 38.25 percent.

Reference no: EM131132028

Questions Cloud

What are some of the difficulties that may arise to keep : While vendor discounts for early payment are very rewarding, what are some of the difficulties that may arise to keep a firm from taking advantage of those discounts?
Journalize both issuances assuming the stock is not publicl : Caribbean Corporation began operations on April 1 by issuing 60,000 shares of $5 par value common stock for cash at $13 per share. On April 19, it issued 2,000 shares of common stock to attorneys in settlement of their bill of $27,500 for organizatio..
What is the logic behind repurchase shares of common stock : What is the logic behind repurchase shares of common stock to distribute excess cash to the firm’s owners?
Describe the vignette that you selected : Describe at least three succession planning best practices you could implement to immediately remedy the negative consequences of the problem described in this vignette.
How might the expected future reappearance of higher tax : How might the expected future reappearance of higher tax rates on individuals receiving dividends affect corporate dividend payout policies?
The stockholders equity section at year end : At the end of its first year of operation, Dade Corporation has $1,000,000 of common stock and net income of $216,000. Prepare
Find the articulation points in a graph : Find the articulation points in a graph. A vertex in an undirected connected graph is an articulation point (or cut vertex) iff removing it (and edges through it) disconnects the graph.
Renaissance style and mannerism in 16th century italy : Write an assignment on dramatic contrast between Renaissance style and Mannerism in 16th century Italy.-The essay consists of a style comparison between Raphael's Small Cowper Madonna and Parmigianino's Madonna with the Long Neck.
Do you agree that corporate managers would manipulate : Do you agree that corporate managers would manipulate their stock’s value prior to a buyback or do you believe that corporations are more likely to initiate a buyback to enhance shareholder value?

Reviews

Write a Review

Finance Basics Questions & Answers

  What enterprise value do you estimate for creed

Neither Creed nor its acquisition target, Organic and More, uses debt financing at present. However, The VC has offered to provide the acquisition financing in the form of convertible debt that pays interest at a rate of 8 percent per year and is ..

  Generate the following income stream

suppose your firm is planning to invest in a project that will generate the following income stream, a negative flow $300000 per year for 5 years , a positive flow of $450000 in the sixth year and a positive flow of $ 650000 per year in years 7 th..

  How derivative products enhances the efficiency

Discuss how derivative products enhances the efficiency of the financial market in the respective countries. (Please note that your discussion should take into consideration of implication of at least one of the country's specific factor)

  Using these data construct the december 31 year 2 balance

you are an analyst reviewing foxx company. the following data are available for your financial analysis unless

  Describe tax liability on dividend income

Describe tax liability on dividend income, interest income and interest on loan paid and Excluding the items noted above, Redbird's taxable income is $500,000

  What is the present value of the cash flows

You will receive $1,200 at the end of the next 15 years, assuming a 8% discount rate, what is the present value of the cash flows?

  Two-year insurance policy on the first day of business

The company paid $12,500 in salaries. Owners invested $13,000 in the business and $13,000 was borrowed on a five-year note. The company paid $3,700 in interest that was the amount owed for the year, and paid $7,700 for a two-year insurance policy ..

  What is the accounts receivable balance

Suppose that Sales for the entire year were $100,000 and Cost of Goods Sold was 80% of Sales. The Inventory Conversion period is 40 days, the Accounts Payable Balance is $2,000, and the Operating Cycle is 60 days. 6. What is the Accounts Receivabl..

  Can the nominal interest rate ever be negative

Can the nominal interest rate ever be negative? Can the real interest rate ever be negative? Please thoroughly explain. What is the relationship between a bond's price and its yield to maturity?

  Find the following values, using the equations

find the following values, using the equations, and then work the problems using a financial calculator to check your answers. Disregard rounding differences.

  A friend promises to pay you 1000 two years from now if

a friend promises to pay you 1000 two years from now if you lend hime 800 today. what annual rate of interest is your

  Ordinary annuity and annuity due

Find out the future value of following annuities. The first payment in these annuities is made at the end of year one. That is, they're are ordinary annuities.

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