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.
d. How much gains go to the acquirer under the stock offer? 11. Mergers and P/E ratios. Castles in the Sand currently sells at a price-earnings multiple of 10. The firm has 2 million shares outstanding, and sells at a price per share of $40.
Week 1 Assignment (2-6) Statement of Retained Earnings In its most recent financial statements, Newhouse Inc. reported $50 million of net income and $810 million of retained earnings. The previous retained earnings were $780 million. How much in dividends was paid to shareholders during the year? 780million+50million=830million-50million=20million (2-7) Corporate Tax Liability The Talley Corporation had a taxable income of $365,000 from operations after all operating costs but before (1) interest charges of $50,000, (2) dividends received of $15,000, (3) dividends paid of $25,000, and (4) income taxes. What are the firm’s income tax liability and its after-tax income?
The beta of the stock is 1.05, and there were 200 million shares outstanding (trading at $60 per share), with a book value of $5 billion. Union Pacific paid 40% of its earnings as dividends and working capital requirements are negligible. (The treasury bond rate is 7%.) The market risk premium is 5.5%. a.
The combined taxes are lower under part b because the majority of the corporation's earnings are only subject to one level of tax (the individual tax on the salary). In part a the taxable income after salary is $200,000 but in part b it is $50,000 since the deduction of $150,000 is taken and this leads to only $50,000 that is taxed twice in part b. 66. [LO 3] In its first year of existence (year 1), Willow Corp. (a C corporation) reported a loss for tax purposes of $30,000. In year 2 it reports a $40,000 loss.
SciTronics’ profit as a percentage of sales in 2008 was 5.7 %. 2. This represented an increase from 3.4 % in 2005. 3. SciTronics had a total of $ 102,000 (75,000 + 27,000) of capital at year-end 2008 and earned before interest but after taxes (EBIAT) $ 16,120 (avg.
Currency risk- if unexpected changes in currency values affect the value of the firm 4. Identify and describe the ways in which a US company can participate in international commerce. 5. The price of a currency forward contract is determined by the relationship between interest rates of the two countries in question and the time period covered by the contract. Is this statement exactly true, partly true or false?
Investors buy stock at the C. quoted ask price. 3. Which of the following statements is most correct? A. The stock valuation model, P0 = D1/ (i - g), can be used for firms which have negative growth rates.
Exercise 3 : The average stock price for companies making up the S&P 500 is 30$, and the standard deviation is $8.20 (BusinessWeek, Special Annual Issue, Spring 2003). Assume the stock price is normally distributed. a. What is the probability that a company will have a stock price of at least 40$ - Find the z-score of 40. That means 40 is 1.2195 standard deviations above the mean.
a. How much in cash or securities must you put into your brokerage account if the broker’s initial margin requirement is 50% of the value of the short position? b. How high can the price of the stock go before you get a margin call if the maintenance margin is 30% of