## Sunday, December 22, 2013

### Fi515 Week 1

(2-6) call forthment of Retained Earnings Net income = \$50 one(a) thousand one million million million Retained clams = \$810 million preceding(prenominal) carry earnings = \$780 million dubiousness: How much in dividends was paid to sh beholders during the year? Formula: Dividend paid = Previous waken retain earnings +Net Income New balance retained earnings Dividend paid = \$780 million + \$50 million - \$810 million = \$20 million in dividends was paid to sh areholders during the year (2-7) Corpo rank assess Liability revenueable income = \$365,000 delight charges = \$50,000 Dividends reliable = \$15,000 Dividends paid = \$25,000 Questions: What are the firms income appraise revenue obligation and its after-tax income? What are the companys marginal and bonny tax pass judgment on taxable income? Income tax liability: assessable income = \$365,000 participation charges = \$50,000 Dividends received = \$15,000x(1-0.70) = \$4,500 \$365,0 00 - \$50,000 + \$4,500 = \$319,5000 Marginal rate ( corporeal levy Rate table, pg. 71) = 39% Income tax liability = \$22,250 + (\$319,500-100,000)x0.39 = \$107,855 After-tax income: Taxable income = \$319,000 Tax liability = \$107,855 Non-taxable dividends received: \$15,000 x (0. 70) = \$10,500 After-tax income = \$319,000 - \$107,855 + \$10,500 = \$222,145 Average tax rate: Average tax rate = Taxable interest income / Taxable operating income = \$107,855 / \$319,500 = \$0.337574x0.100 = 33.8% (2-9) Corporate After-Tax Yield Invest = \$10,000 AT&T Bonds = 7.5% State of Florida muni bonds = 5% (no t taxable) AT&T preferable gunstock with ! dividends = 6% Tax rate = 35% Dividends received = 70% (tax exempt) Question: let out the after-tax rates of return on all third securities. AT&T bonds: 7.5% x \$10,000 = \$750 Taxes: \$750 x 0.35 = \$262.50 \$750 - \$262.50 = \$487.50 Yield AT&T bonds = \$487.50/\$10,000 = 0.04875 x 100% = 4.875% AT&T preferred stock: 6% x \$10,000 = \$600 Dividends received: \$600 x 0.7 = \$420 \$600 - \$420 = \$ clxxx Taxes: \$one hundred eighty x...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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