15. Vodacom SA has a dividend payout ratio of 70%. The personal tax rate on dividend incomeis 20 %, and the personal tax rate on capital gains is 11%. TC= (Corporate tax rate) = 28%;and TP= Personal tax rate on interest income = 22%: Calculate the relative tax advantageof debt with personal and corporate taxes.a.1.31b. 1.28c. 0.78d. 0.60e. 0.17

Personal tax on equity income means the tax charged on the income that is equity in nature. The…

Answered: 15. Vodacom SA has a dividend payout…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Suppose a company named Arts Pvt. Ltd has taken a loan from a bank for business expansion at a rate of interest of 8%, and the tax rate is 20%. Calculate the cost of debt.
13. Greenforest Industries has EBIT of $450 million, interest expense of $175 million, and a corporate tax rate of 21%. The amount of Greenforest's interest tax shield is closest to: A) $115 million. B) $290 million. C) $175 million. D) $37 million.
Ursala, Incorporated, has a target debt-equity ratio of 1.10. Its WACC is 8.2 percent, and the tax rate is 21 percent. a. If the company's cost of equity is 11 percent, what is its pretax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. If instead you know that the aftertax cost of debt is 6.1 percent, what is the cost of equity? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Cost of debt Les I % b. Cost of equity %
Assume that the personal tax rate on interest income is 15% and the personal tax rate on dividends is 10%. Assume also that the Company generates EBIT equal to 5 euros and distributes 40% of these earnings (payout ratio = 40%) to its shareholders. What is the net income that the shareholder receives after taxes? Coporate tax =22% a) 3.51 b) 1.40 c) 1.78 d) None of the above.
aa.1
d. Calculate Carnival's current WACC using a 21% corporate tax rate.
Assume that a company borrows at a cost of 0.08. Its tax rate is 0.35. What is the minimum after-tax cost of capital for a certain cash flow if a. 100 percent debt is used? b. 100 percent common stock? (assume that the stockholders will accept 0.08)
The cost of debt for Salalah Mills is 15.25% (effective rate) and its tax rate is 30.05% then what is the after tax cost of debt? Select one: O a. 10.66% O b. 12.50% O c. 10% d. None е. 10.60%
Q1. Given, interest rate or coupon rates or dividend rate of the following - Corporate bond = 6.5% Municipal bond = 4% Preferred stock = 5% and Corporate tax rate = 45% Note - 70% of the dividends received are tax exempt . a. What is the after tax return of corporate bond, municipal bond and preferred stock? b. What will be the best choice to invest?
give me answer
Am. 111.
If the cost of debt after tax for Sohar Textiles is 0.156 and its tax rate is 0.233 then what is the cost of debt? Select one: a. 0.1923 b. None of the options c. 0.2034 d. 0.1265 e. 0,1197

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