The parent receives annual dividends from the subsidiary of $2,500,000. If the parent's marginal tax rate is 34% and if the exclusion on intercompany dividends is 70%, what is the effective tax rate on the intercompany dividends, and how much net dividends are received? Question 20 New York Waste (NYW) is considering refunding a $50,000,000, annual payment, 14% coupon, 30-year bond issue that was issued 5 years ago. It has been amortizing $3 million of flotation costs on these bonds over their 30-year life. The company could sell a new issue of 25-year bonds at an annual interest rate of 11.67% in today's market.
A type A merger would increase market power which would increase market share. Increase in market share would increase profitability. A merger is also recommended because with Smithon’s positive income can offset with Johnson’s negative income and would result in reduced tax liabilities. A merger redefines the business world which allows for improve corporate business strategies and philosophies along with stronger alliances and less competition. There are many reasons for a merger but the most important is to maximize its profits.
There are two main profit maximization methods used, and they are Marginal Cost-Marginal Revenue Method and Total Cost-Total Revenue Method. Profit maximization is a good thing for a company, but can be a bad thing for consumers if the company starts to use cheaper products or decides to raise prices. This is what some firms in the leisure industry will aim to do, for instance, Cinemas will hope to achieve the highest level of profits. Although most firms in the leisure industry aim to maximise profit, some firms have other main objectives, such as to maximise growth. Growth maximisation is where the firm’s main goal is to increase the size of the firm as much as possible.
1. As a result of the changes the new president has implemented, it appears as though net income is now positive rather than negative which looks good from an investors standpoint. However, what’s really important for us to look at is the arrival of this endpoint rather than the endpoint itself. His decision to increase production from 17,000,000 units to 30,000,000 was quite a bold one considering sales and production were exactly even at the time of hire. What would happen if B.E.
Alternatively, it could sell the rights to the highest bidder. ! Most first films would not justify sequels, so this option would expire unexercised. ! The rights must have a specific expiration date (say 3 years from the first film’s release), by which time they would have to decide or forfeit the rights (usually, for most films, it is clear after the first few weeks whether a sequel would be profitable or not).
This figure is substrated from the acquisition giving a result of £332,641 which is the written down value. The capital allowance for the first year is £66,528 which is shown in appendix 9 Corporation tax worked out at the main rate of 21% from 1st of April of 2011 (Reference 7). The profit substrates the capital allowance and gives the taxable profit for the next year which is shown in appendix
• Compute and illustrate the effect on the income statement for the year ended Dec 31, Year 1, and for the balance sheet as of Dec. 31, Year 1. • Construct a table showing payments of interest and principal made every year for the five year lease term • Construct a table showing expenses charged tot eh income statement for the five year lease term if the equipment is leased. Show a column for amortization, interest and total expenses. • Discuss the income and cash flow implications from this capital lease. Problem 2 On January 1, Borman Company, a lessee, entered into three non-cancellable leases for new equipment identified as J, K and L. None of the three leases transfers ownership of the equipment to Borman at the end of the lease term.
The Rays would therefore charge 150 million to the investor (316+150=466, 150/466 = approximately 32 %). Current Salaries for the 2011 season amount to approximately 42 million. This would generate a good amount of surplus funds to go out and buy players via trade or free agency that can help market the team easier and raise revenue. The excess cash can also be used to cover existing costs, make stadium renovations or anything that will help in increasing net income. Promotion Excess money stemming from a hopeful investor will allow there to be more funds for advertising and sales promotions which will in turn create more revenue through sponsors.
The EHC will receive $2,300,000 from managed care companies and Medicare in three months, but the shortfall at the business must be resolved first. To achieve this, we must determine two cost cutting measures. A loan option must be identified as well. The cost cutting options we have at EHC are reducing benefits, reducing agency staff, downsizing staff, reducing length-of-stay, or changing the skill mix (University of Phoenix, 2015). To achieve a cost saving target of $750,000 for the first quarter the first cost cutting measure I selected is reducing a proportion of the agency contracted staff.
11 percent $ _____ c. 7 percent $ _____ 2. Watters Umbrella Corp. issued 20-year bonds 2 years ago at a coupon rate of 8.4 percent. The bonds make semiannual payments. If these bonds currently sell for 90 percent of par value, what is the YTM? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)