ne government
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Please if you don't know the answer or you can't
provide the formula and calculation leave the
question to other expert who can answer it.
Suppose that the government has a wealth tax
at the rate of 2% on the assessed value of
wealth. Suppose that Wendy has invested all her
wealth in a private corporation. Her wealth
amounts to $4,000,000 in shares of this
company. Suppose that this stock delivers a
dividend income of $200,000 per year. Assume
there is no inflation and that interest rates are
3%. Show your work.
Wendy's wealth tax liability is
$___.
$_---
(show your
calculation)
Wendy's shares generate a net of tax income is
per year. (show your
calculation)
Suppose a Conservative party were elected on a
platform of eliminating the wealth tax. The value of
Wendy's shares if the wealth tax was eliminated
would be $
calculation)
_-(show your
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