ABC Industries, which is in the 25% tax bracket, must pay $4,200,000 in annual interest to its bondholders. Calculate the after-tax cost to the corporation
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- Corporation X needs $1,000,000 and can raise this through debt at an annual rate of 6 percent, or preferred stock at an annual cost of 8 percent. If the corporation has a 21 percent tax rate, the after-tax cost of each is ________.Determine the (after-tax) component cost of a $50 million debt issue that the Mattingly Corporation is planning to place with a large insurance company. Assume the company is subject to a 40% tax rate. This long-term debt issue will yield 12% to the insurance company.The Wendt Corporation reported $45 million of taxable income. Its federal tax rate was 21% (ignore any possible state corporate taxes). What is the company's federal income tax bill for the year? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000. Round your answer to the nearest dollar. $ Assume the firm receives an additional $1 million of interest income from some bonds it owns. What is the additional tax on this interest income? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000. Round your answer to the nearest dollar. $ Now assume that Wendt does not receive the interest income but does receive an additional $1 million as dividends on some stock it owns. Recall that 50% of dividends received are tax exempt. What is the additional tax on this dividend income? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000. Round your…
- The XYZ, Inc. reported $50 million of taxable income. Its federal tax rate was 21% (ignore any possible state corporation taxes). What is the company’s federal income tax bill for the year? Question 1 options: a) $11,500,000 b) $10,500,000 c) $12,100,000 d) $11,100,000Xavier Corporation ends the year with net income of $250,000 and long term capital gains of $30,000. How are the long term capital gains treated? What will be the tax owed by the corporation? Write in complete sentences. Show all necessary calculations.If a company earns $48,000 income on a municipal bond and the tax rate is 20%, Income tax expense would exceed income taxes to pay by 48,000 x .20 Income tax expense would be less than income taxes to pay by 48,000 x .20 The current portion of income taxes would exceed income tax expense by $48,000. Income tax expense would equal income taxes to pay.
- Assume that a corporation has $100,000 of taxable income from operations plus $5,000 of interest income and $10,000 of dividend income. What is the company’s federal tax liability?What is the effective after tax interest expense for the firm of this financial accounting question?Haricot Corporation and Pinto Corporation both have operating profits of $195 million. Haricot is financed solely by equity, while Pinto has issued $245 million of 6% debt. If the corporate tax rate is 21%: Required: a. How much tax does each company pay? b. What is the total payout to investors (debtholders plus shareholders) of each company? Complete this question by entering your answers in the tabs below. Required A Required B How much tax does each company pay? Note: Enter your answer in dollars not in millions. Tax Amount Haricot Pinto
- Need Help with this QuestionGoose Industries faces the following tax schedule. Last year the company realized $15,000,000 in operating income (EBIT). Its annual interest expense is $7,500,000. (1) Compute the company’s income taxes payable? Use the tax rate table below. (2) What was the company’s net income for the year? If a corporation's taxable income is It pays this amount on the base of the bracket Plus this percentage on the excess over the base (marginal rate) Average tax rate at top of bracket Up to $50,000 $0 15% 15.0% $50,000 – $75,000 $7,500 25% 18.3% $75,000 – $100,000 $13,750 34% 22.3% $100,000 – $335,000 $22,250 39% 34.0% $335,000 – $10,000,000 $113,900 34% 34.0% $10,000,000 – $15,000,000 $3,400,000 35% 34.3% $15,000,000 – $18,333,333 $5,150,000 38% 35.0% Over $18,333,333 $6,416,667 35% 35.0% (1) $2,436,000 (2) $4,950,000 (1) $2,550,000 (2) $4,950,000 (1) $2,550,000 (2)…Calculate Anaheim Corporation's excess net passive income tax in each of the following alternative scenarios: a. Passive investment income, $100,000; expenses associated with passive investment income, $40,000; gross receipts, $208,000; taxable income if a C corporation, $22,400; corporate Earnings and profit, $41,000. Excess net passive income tax??? b. Passive investment income, $100,000; expenses associated with passive investment income, $70,000; gross receipts, $208,000; taxable income if a C corporation, $5,600; corporate Earnings and profit, $41,000. Excess net passive income tax??? c. Passive investment income, $100,000; expenses associated with passive investment income, $40,000; gross receipts, $208,000; taxable income if a C corporation, $22,400; corporate Earnings and profit, $0. Excess net passive income tax???
