A. $16,500 B. $9,000 C. $25,500 D. $7,500 E. $50,000 Difficulty: Easy 2. Yaro Company owns 30% of the common stock of Dew Co. and uses the equity method to account for the investment. During 2008, Dew reported income of $250,000 and paid dividends of $80,000.
The bonds mature in 10 years. The firm’s average tax rate is 30% and its marginal tax rate is 34%. b. A new common stock issue that paid a $1.75 dividend last year. The par value of the stock is $15, and earnings per share have grown at a rate of 8% per year.
What is the amount of its credit carryover and the last year to which the carryover could be used? Answer: $7,750 carried over to 2004 or 2025 4. Margolin Corporation has a regular taxable income of $120,000. It has a positive adjustment of $90,000, preference items of $50,000 and negative adjustments of $40,000. What is its alternative minimum tax?
Chapter 2. 2-14 a. Cumberland Industries' most recent sales were $455,000,000; operating costs (excluding depreciation) were equal to 85% of sales; net fixed assets were $67,000,000; depreciation amounted to 10% of net fixed assets; interest expenses were $8,550,000; the state-plus-federal corporate tax rate was 40% and Cumberland paid 25% of its net income out in dividends. Given this information, construct Cumberland's income statement. Also calculate total dividends and the addition to retained earnings. The input information required for the problem is outlined in the "Key Input Data" section below.
The present value of a four-year annuity due of $10,000 at a 6 percent annual rate is $36,700. The present value of a four-year annuity due of $10,000 at an 8 percent annual rate is $35,770. What liability should Ace report on its December 31, Year One, balance sheet? 1. $0 2.
Fixed expenses are $424,000 per month. The marketing manager believes that a $7,000 increase in the monthly advertising budget would result in a 100 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change? A. Increase of $8,000 B.
The business required £30,000 cash for working capital. The company gets a loan of £450,000 which was transfer into the business bank account in January as shown in appendix 6. The cash budget shows a balance of £3,918 in January and £16,335 February. The loan calculation is shown in appendix 8. This is expected to be paid back within 8 years by monthly paid instalments of £5.718.41 which was calculated on a 5.1% interest rate.
Calculate the expected return and standard deviation of his portfolio if he invests: (a) 40% in share X and 60% in share Y. [40%] (b) 70% in share X and 30% in share Y. [40%] (c) Calculate the correlation coefficient between X and Y. [20%] Question 3 a) Suppose your neighbour wants to invest in bonds. One of the choices is a corporate bond with a coupon rate 2%, 2-year maturity with par value of £1000 paying annual coupon payment.