However, continuing the 60% dividend has already prevented Bessemer from turning down positive NPV projects, and will continue to stunt other growth opportunities. When only considering future growth, cutting the dividend to 20, 30, or 40 percent would be a wise decision for Bessemer. Retained earnings would increase, allowing for increased investment, the addition of assets, and subsequently higher income. While this decision makes sense on that front, it would do nothing more than lead current shareholders to sell their shares. At present, Bessemer’s shareholders are hoping for a higher dividend and cutting it would only upset these shareholders.
Changing to a calendar year end has little useful effect, and it requires that Smithon produce a short-year tax return from Dec to Jan, which is a relatively unnecessary administrative expense. What potential income tax ramifications exist for Mr. Johnson personally if he purchases the stock of Smithon and converts it to an S corporation? A: Mr. Johnson will be personally taxed on all of Smithon's income. This has the advantage of eliminating the double taxation usually associated with a C-Corporation. However, it will increase Johnson's current tax liability.
Callable preferred stock permits the corporation at its option to redeem the outstanding preferred shares at stipulated prices. T13. The laws of some states require that corporations restrict their legal capital from distribution to sh. F14. The SEC requires companies to disclose their dividend policy in their annual report.
The ex-partners appealed by asserting the following arguments: 1. If the corporation had still be in business, the money paid for the settlement would be considered ordinary business loss, and since they were now liable for the corporation’s liabilities they should also be able to benefit of the same tax treatment. 2. They also argue that in the year of the correction they did not buy or sell anything for such reason capital gains or loses did not apply to them. ISSUES: the following issues arose from the case: 1.
In the short run firms may not increase their profits because the cuts in prices but if they achieve this in long run they may experience maxim profits. However the directors try to imply polices which do not always maximize the profits their objective is to satisfy the owners by getting some profit and growing the company in order to receive bigger market share to influence prices and quantity produced. I think that the managers should firstly try to grow the company and work for normal profit and maybe in long run obtain super normal profits. In short run they try to achieve lots of other objectives regardless profit
Income taxes- The business and owner are taxed as a single unit. The owner can legally reduce taxable income by deducting expenses like depreciation (cost of equipment deducted over a period of time. III. Longevity or continuity of the organization- Even though insurance can be purchased to safeguard family and meet financial obligations if the owner should die, the business will likely terminate. Unless specifically stated in the owner’s last will that the business may be continued, state laws require all business activities to cease.
It would ban the political use of money deducted from paychecks by unions or corporations. And it would ban government contractors from contributing to the campaigns of public officials who control the awarding of those contracts (The Sun). By eliminating the payroll deduction union members contributions to political activity will be their decision. Proposition 32 would cut money ties between big unions and politicians and also gets corporate big money out of the politician’s pocket. The measure will curb unions’ outsized political influence everywhere, too often resulting in laws that benefit union members over the interest of all Californians.
The vendor will be function in effort to make a profit as is with all businesses. The problems can come when the vendor needs to increase profit and since the contracts are normally a fixed price, the only way for them to do so is to decrease expenses. This is a viable option as long as they meet the conditions specified in the contract (Bucki, 2012). When outsourcing to another company, your organization is now tied to the financial well-being of the vendor. The problem can arise when after contracting out the IT functions of the organization and paying the fees negotiated, the vendor goes bankrupt leaving the companies who have contracted to them without an IT resource (Bucki,
1. Outright purchase of Smith stock a) Yes, Mr. Jones should purchase the stock of Smith outright, leaving Smithon intact as purchasing the stock of Smith co. is the simple and reasonable transaction where he can also minimize the cost of administrative matters. While issuing debt in his Johnson Services Co. to pay for the Smith Company there can arise debt issue for Johnson co if the cash flow of the company is insufficient in making such purchase to buy Smith co stock. b) Converting C corp to S corp has taxation benefit as C corp faces double taxation. Here, converting Smithon to S corp can give an advantage of having a control of limited or small number of shareholders.
Instead of agreeing to leave the economy in the hands of an enabling government, republicans feel for an economy jumpstarted and fueled by the wealthy. Instead of destroying the wealthy, republicans feel that placing more money in the hands of the rich instead of taking it from them will encourage spending nationwide. This will allow for more jobs through business growth, which allows for a decreasing poverty rate as people on welfare transition to being self-sufficient members of society. As common sense as this may stand many take aim against this “For America to get back on track we are probably going to cut that sort (The upper class tax breaks) and not give it to you, we are going to take things away from you on behalf of the common good (Hillary Clinton)”. Anti business and enabling irresponsibility, people oppose the undenying common sense of this idea.