Would would an investor prefer to receive a distribution as a repurchase (capital gain)?     Answers: Lower tax rate on dividends than capital gains   Higher tax rate on dividends than capital gains   Greater certainity   Greater uncertainity

Q: Unrealized los

A: Meaning: Deferred tax is defined as tax effect due to timing difference i.e. difference between…

Q: What tax treatment do individual investors generally prefer in stock redemptions? Why?

A: Under the process of stock redemption, entire redemption amount is considered as the part of taxable…

Q: Which of the following is an argument for the relevance of dividends? High dividends are a signal…

A: When the corporation earns profit, a part of the profit is distributed by them to their shareholders…

Q: Profits that have been subjected to IAET will be liable to dividend tax when they are eventually…

A: Tax is the charge which is charged on the taxable income earned by the corporation or business…

Q: What is the effect of a rise in the income tax on interest income? A rise in the income tax on…

A: Tax means the mandatory payment made by assesse to the government without expecting anything…

Q: When one uses the after-tax weighted average cost of capital (WACC) to value a levered firm, the…

A: Introduction:- The main use of Weighted average cost of capital is to determine the cost of each…

Q: Why is the after tax cost of debt rather than the before tax cost used to calculate the weighted…

A: Weighted average cost of capital :  WACC or Weighted average cost of capital, as the name suggests,…

Q: Which of the following might discourage covered interest arbitrage even if interest rate parity does…

A: In a Covered interest rate arbitrage one uses favorable interest rate differentials to invest in a…

Q: Which of the following is a constrain for the investors? a. The mentality tontake the high risk b.…

A: Investing is a critical component of wealth growth. It enables the investor to fight inflation,…

Q: But capital gains may be tax-advantaged for some investors. Therefore, tInterest = tDividends but,…

A: The Imputation system implies that firm income distributed as dividend effectively taxes at the…

Q: Who are the major purchasers of “regular” preferred stock? How do tax considerationsaffect these…

A: Stocks are the company’s shares which the company issues to its shareholders to raise funds and…

Q: How much in taxes would the target firmhave to pay on any gains it realizes?

A: Corporate taxes are calculated on the gross profits after the expenses have been deducted from the…

Q: An investor pays taxes on unrealized gains on equity investments   options:   True   False

A: An unrealized gain could be a potential profit that exists on paper, resulting from an investment.…

Q: Which of the following regarding the weighted-average cost of capital is true?  Group of answer…

A: The weighted average cost of capital is the average rate that a company is expected to pay to its…

Q: Why would a company decide to pay investors cash? What are the two ways to give cash back to…

A: Cash is paid in terms of dividends.

Q: 1. Which of the following is not considered a purpose of taxation? a. To regulate inflation b. To…

A: Hi student Since there are multiple questions, we will answer only first question. Taxes are the…

Q: True or False An increase in the capital gains tax rate decreases the total amount of unrealized…

A: capital gains:- A capital gain is an increase in the value of a capital asset that is realized when…

Q: What is an imputation tax system? Briefly explain the chronology of dividend payment.

A: Countries like Australia and New Zealand follow 100% imputation system, whereas Canada and United…

Q: Which source of investor income is susceptible to double taxation? Interest earned O Dividends

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: 2. What is the interpretation of the effective dividend taxrate?

A: The effective dividend tax rate is different from the dividend tax rate because the corporation's…

Q: What do an appropriation of accumulated profits and a declaration of a cash dividend have in common?…

A: Cash dividends are accounted for as a reduction of retained earnings(Accumulated profits)…

Q: he most tax-advantaged form of income for investors is Group of answer choices a. long-term capital…

A: Long-term capital gains and losses shall be the benefit or loss arising from the selling, for more…

Q: What does the Miller model with personal and corporate taxes implyabout value relative to the MM…

A: Answer: The Modigliani and miller approach states that, aside from the risk inherent in the project,…

Q: xplain the benefit approach and ability to pay approach with tax equity. Which approach is…

A: Taxes are the payments made by the individuals and corporation on their earnings. It is a compulsory…

Q: With or against those arguments? Taxing wealth Progressive taxation system Regressive taxation…

A: Taxing wealth : It is about imposing the tax or collecting the tax on the wealth capital of the…

Q: hort term capital gains taxes are higher than long term capital gains taxes. How does the different…

A: At the point when you sell a capital resource for more than you paid for it, the outcome is a…

Q: EBITD is equivalent to profits after taxes. true or false?

A: EBITDA is the earnings before interest tax depreciation and amortization.

Q: Explain the concept of Tax Deduction in WACC. Does this tax deduction make debt finance Cheaper Then…

A: WACC is the weighted average cost of equity, cost of debt and cost of preference capital.

Q: What is the compressed adjusted present value(APV) model, and how does this differ from…

A: The sum of the net present value and the financial benefits calculated by other methods of…

Q: Why is no tax adjustment made to the cost of preferred stock?

A: The cost of preferred stock is the minimum required rate expected from the issuance of the preferred…

Q: The most tax-advantaged form of income for investors is

A: Ownership of an organization can be broken down into small parts or units also known as Shares.…

Q: Questions: 1) Is the proposed sin tax progressive or regressive? Who will be burdened most? Why? 2)…

A: Sin Taxes The applicability of sin taxes mainly incurred for the harmful product in the society as…

Q: you mean by preference capital ? 2. What do you mean by fair value ? 3. What do you mean by the…

A: Money raised by the  company for business may be equity or debt or preference shares.

Q: a) – Explain the concept of Tax Deduction in WACC. Does this tax deduction make debt finance Cheaper…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Do you believe that the cash flows from the sale of an investment should also include the tax effect…

A: Cash Flows in any entity's books reflect the inflow and outflow of cash during a specified period

Q: EBIT is equivalent to profits after taxes. true or false?

A: EBIT is the earnings before interest and tax.

Q: Using the adjusted present value model, under what assumptionsare the MM (with corporate taxes)…

A: MM model shows that company’s market value is computed as a PV of company’s future earnings which is…

Q: Explain with hypothetical example the effect of Investment Tax Credit.

A: Investment Tax Credit is an opportunity provided while filing for taxation where a deduction of a…

Q: Explain how an investor in an equity REIT may receive a current dividend, part of which may be…

A: Introduction: Equity REITs requires a direct investment in restaurants, shopping malls and office…

Q: What is the relative tax advantage of debt when corporate and personal taxes are considered?

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: What is the fundamental difference in a general stock redemption vs. a Liquidating Distribution?…

A: Income tax is the payment required to be made to the authority which is charged to collect the…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.