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You are a shareholder in a corporation, The corporation earns $20 per share before taxes. After it has paid taxes, the corporation chooses to retain this cash. The corporate tax rate is 30% and your tax rate on dividend income is 10%. How much of the earnings remain after all taxes are paid? Selected Answer: a. 14$ Answers: a. 14$ b. 12.65 C 18$

chapter 10 question 1 Assume an investor can earn 0.15 before tax and 0.12 after tax. A corporation can earn 0.14 after corporate tax. It has $100 available for investment. The tax rate on dividends and capital gains is 0.15. If the corporation retains for 15 years and then pays a dividend the investor nets $__________. If the corporation pays an immediate dividend, the investor will have (after 15 years) $_________

Q No. 2 Read carefully the following scenarios and answer the questions asked in each scenario after analysis:   A. You are a shareholder in a C corporation. The corporation earns $2.00 per share before taxes. Once it has paid taxes it will distribute the rest of its earnings to you as a dividend. Assume the corporate tax rate is 40% and the personal tax rate on (both dividend and non-dividend) income is 30%. How much is left for you after all taxes are paid? B. Recall the last time you ate at an expensive restaurant where you paid the bill. Now think about the last time you ate at a similar restaurant, but your parents paid the bill. Did you order more food (or more expensive food) when your parents paid? Explain how this relates to the agency problem in corporations. C. You are the CEO of a company and you are considering entering into an agreement to have your company buy another company. You think the price might be too high, but you will be the CEO of the combined, much larger…

You are a shareholder in a corporation. The corporation earns $5 per share before taxes. After it has paid taxes, it will distribute the rest of its earnings to you as dividend. The corporate tax rate is 30% and your personal tax rate on dividend income is 25%. What is the amount of your after-tax earnings on dividend?   a. 0.875   b. 1.25   c. 1.875   d. 2.625   e. 3.50

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Financial accounting chapter 12

8. The tax system Understanding taxes From a corporation's point of view, does the tax treatment of dividends and interest paid favor the use of debt financing or equity financing? O Equity financing O Debt financing You bought 1,000 shares of Tund Corp. stock for $75.00 per share and sold it for $77.25 per share within the same year. How will your gain or loss be treated when you file your taxes? O As a capital gain taxed at the current ordinary-income tax rate O As a capital gain taxed at the long-term tax rate Depreciation expenses directly affect a company's taxable income. An increase in depreciation expense will lead to a v taxable income. It will v tax deducted from a company's earnings, thus leading to a v operating cash flow, According to a tax law established in 1969, taxpayers must pay the of the Alternative Minimum Tax (AMT) or regular tax. Which of the following cash outflows cannot be deducted from the operating income to derive the taxable income? O Interest paid O…

PROBLEM FIVE Wrap Ltd. is a Canadian-controlled private corporation. At the end of 2022, Wrap had the following tax account balances. Non-capital losses $ 8,000 Net capital losses 2,000 Non-eligible RDTOH 7,000 Dividend refund from non-eligible dividends 1,000 CDA 12,000 For the current year, 2023, net income for tax purposes is $261,000. Included in this amount is the following. Income from an active business carried on in Canada $200,000 Taxable capital gain 6,000 Eligible dividends from Canadian public companies 15,000 Canadian bond interest 40,000 The following is a summary of other information for Wrap Ltd. for the 2023 year. Taxable income Required: $236,000 Capital dividend paid 12,000 Eligible dividend paid 10,000 Non-eligible dividend paid 75,000 Small business deduction 38,000 Total Federal Part I tax payable 31,920 Determine the dividend refund for 2023. Would the dividend refund change if Wrap Ltd. was not a CCPC but instead was a private corporation or a public…

Item 2   The tax rates for a particular year are shown below:  Taxable Income Tax Rate $0 – 50,000   15 % 50,001 – 75,000   25 % 75,001 – 100,000   34 % 100,001 – 335,000   39 %    What is the average tax rate for a firm with taxable income of $129,513?

Question 1: (4 parts @ 0.5 marks = 2 marks) Alan earns net income before taxes of $10,000 from his small business corporation (SBC) in the year ending December 31, 2017. He is considering reinvesting the business earnings (net of corporate income taxes) into zero-dividend common shares that are expected to appreciate in value by 8% per annum commencing January 1, 2018. Alan's personal marginal tax rate is 40% (federal provincial combined) on regular income and 27% on non-eligible dividends (net of dividend tax credit ). Assume that the investment income earned by the SBC will be considered merely ancillary to its active business and therefore the 16% SBC rate will continue to apply to all income earned within the corporation Required : (A) (B) . If Alan earns the $10,000 directly as self-employment or professional income in 2017 and invests it, what will be his (after-tax) consumable wealth on 31, 2018? December pay If Alan earns the $10,000 through his SBC in 2017, has the corporation…

Assume your new venture, organized as a proprietorship, is in its first year of operation. You expect to have taxable income of $50,000. Use the income tax rate information contained in Figure 3.6 to estimate the amount of income taxes you would have to pay. Requirement: If your venture had been organized as a standard corporation instead of a proprietorship, calculate your income tax liability.

Assume that dividends are taxed at your marginal tax rate of 38% while capital gains are taxed at 15%. How much more will you net if you earn $1200 in capital gains than if the $1200 were dividend income? Group of answer choices $300.00 $180.00                                                       $456.00 $276.00

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TABLE 3.6 Personal tax rates, 2022. Taxable Income ($) Single Taxpayers Married Taxpayers Filing Joint Returns Tax Rate (%) 0-9,950 0-19, 900 10 % 9,950-40, 525 19,900-81, and above 628, 300 and above 37% \\\ You have set up your tax preparation firm as an incorporated business. You took $80,000 from the firm as your salary. The firm's taxable income for the year (net of your salary) was $30,000. Assume you pay personal taxes as an unmarried taxpayer. Use the tax rates presented in Table 3.6. How much tax must be paid to the federal government, including both your personal taxes and the firm's taxes? By how much will you reduce the total tax bill if you cut your salary to $50,000, thereby leaving the firm with taxable income of $60,000? What allocation will minimize the total tax bill? Hint: Think about marginal tax rates and the ability to shift income from a higher marginal bracket to a lower one. Note: Do not round your intermediate calculations. Round your final answers to nearest…