Regarding key employee disability income insurance

Assignment Help Financial Management
Reference no: EM131185096

All of the following are true regarding Key Employee Disability Income insurance, EXCEPT:

A: The employer owns the policy

B: Premiums are not tax deductible for the employer

C: Benefits are taxable to the employer

D: Benefits are payable to the employer to retrain a new person

Reference no: EM131185096

Questions Cloud

Under what conditions will you exercise the option : You are receiving fixed on a 3-year swap at 1% versus Libor. You pay 50 bps upfront for a one year option to pay fixed at 1% for 2 years. Under what conditions will you exercise the option? If you do not exercise the option, what is your annualized r..
What is pretax cost of debt and aftertax cost of debt : Jiminy’s Cricket Farm issued a bond with 10 years to maturity and a semiannual coupon rate of 6 percent 2 years ago. The bond currently sells for 95 percent of its face value. The company’s tax rate is 35 percent. What is the pretax cost of debt? Wha..
What is your best estimate of the companys cost of equity : Stock in Daenerys Industries has a beta of 1.2. The market risk premium is 9 percent, and T-bills are currently yielding 4.6 percent. The company’s most recent dividend was $1.80 per share, and dividends are expected to grow at an annual rate of 8 pe..
Regarding the tax implications of health insurance : All of the following are true regarding the tax implications of health insurance EXCEPT:
Regarding key employee disability income insurance : All of the following are true regarding Key Employee Disability Income insurance, EXCEPT:
Why would person consider buying disability income coverage : Why would a person consider buying Disability Income coverage that covers on the job injury:
Describe interest rate risk and reinvestment rate risk : Describe interest rate risk and reinvestment rate risk and how these relate to the maturity risk premium. Based on reinvestment rate risk, provide an example on how a 1-year bond or a 10-year bond would be a better investment for a typical community ..
What is the price per share of the companys stock : Ward Corp. is expected to have an EBIT of $2,200,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $171,000, $97,000, and $121,000, respectively.  What is the price per share of the company's st..
What is the federal estate tax paid : Hank and Wendy are married to each other, are both US citizens, and have two minor children. Their property consists of the following: Commercial property (cost $850,000; fair market value $5,300,000) held in Hank's name, as his separate property. Wh..

Reviews

Write a Review

Financial Management Questions & Answers

  Totally irrational for a firm to sell a new issue of stock

The cost of retained earnings is less than the cost of new outside equity capital. Consequently, it is totally irrational for a firm to sell a new issue of stock and to pay cash dividends during the same year. Discuss the meaning of those statements.

  What is the actual exchange rate today

One year ago the spot exchange rate between the Chilean peso and the U.S. dollar was Ps600.00/$. During the past year, the Chilean peso fell 35% in value against the dollar. During this same 12-month period, prices in the U.S. were stable but Chilean..

  Maintaining constant dividend payout ratio

Maintaining a constant dividend payout ratio is a dividend policy avoided by most firms because:

  Calculate the bonds price today

General Mills has a $1,000 par value, 12 year bond outstanding with an annual coupon rate of 3.60% per year paid semi annually. Market interest rates on similar bonds are 12.70%. Calculate the bonds price today.

  Type of common stocks and one type of bond outstanding

Cooper has one type of common stocks and one type of bond outstanding. The total book value for the common stocks is $10million and the book value per share is $2million. The expected market premium is 12% and the current risk rate is 3%. Cooper equi..

  Calculate the future value of earning

Calculate the future value of $5,000 earning 10% after one year assuming annual compounding. Richard Gorman is 65 years old and about to retire. He has $500,000 saved to supplement his pension and Social Security, and would like to withdraw it in equ..

  Financial intermediarie play crucial role in economic crisis

“Financial intermediaries play a crucial role in an economic crisis–they are responsible for both causing the market to crash and then helping it recover from the crisis.” Is this statement true? Discuss with an example.

  Estimates for the electric scooter project

Roderick Electric Scooter, Inc., staff has come up with the following estimates for the electric scooter project: Conduct sensitivity analysis. What are the principal uncertainties in the project? Assume an initial investment of $16 million to be dep..

  Write the expression for npv using the unknown r as discount

Consider the following cash flow [-100, + 230, -132]. We want to decide under what range of discount rate this is an advantageous investment. But noting the change in sign, we conclude IRR is not a suitable instrument.Write the expression for NPV usi..

  How expensive car can you afford

Suppose you can afford to pay $ 250 a month for 9 years towards a new car with no down payment. If the current interest rates are 4.25%, how expensive a car can you afford?

  How many additional dollars of interest

You have $1,000 in an account which pays 5% ANNUAL compound interest. How many ADDITIONAL dollars of interest would you earn over a four year period if you moved the money to an account earning 7%?

  What is its estimated value per share

Nabor Industries is considering going public but is unsure of a fair offering price for the company. Before hiring an investment banker to assist in making the public offering, managers at Nabor have decided to make their own estimate of the firm's c..

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