PRIN.OF CORPORATE FINANCE
13th Edition
ISBN: 9781260013900
Author: BREALEY
Publisher: RENT MCG
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 16, Problem 25PS
Payout and taxes* Which of the following U.S. investors have tax reasons to prefer companies that pay out cash by repurchases instead of cash dividends? Which should not care?
- a. A pension fund.
- b. An individual investor in the top income-tax bracket.
- c. A corporation.
- d. An endowment for a charity or university.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
3. Do the wealthiest corporations receive a tax break in terms of a lower tax rate? Explain.
4. What is the cash flow identity? Explain what it says.
What does the Miller model with personal and corporate taxes implyabout value relative to the MM model with just corporate taxes?
he most tax-advantaged form of income for investors is
Group of answer choices
a. long-term capital gain income
b. dividend income
c. interest income on corporate debt
d. Both dividend income and long-term capital gain are equal in their tax advantage
Chapter 16 Solutions
PRIN.OF CORPORATE FINANCE
Ch. 16 - Dividend payments In 2017, Entergy paid a regular...Ch. 16 - Dividend payments Seashore Salt Co. has surplus...Ch. 16 - Repurchases Look again at Problem 2. Assume...Ch. 16 - Repurchases An article on stock repurchase in the...Ch. 16 - Company dividend policy Here are several facts...Ch. 16 - Prob. 7PSCh. 16 - Information content of dividends What is meant by...Ch. 16 - Information content of dividends Does the good...Ch. 16 - Information content of dividends Generous dividend...Ch. 16 - Prob. 11PS
Ch. 16 - Payout policy in perfect capital markets Go back...Ch. 16 - Payout policy in perfect capital markets Go back...Ch. 16 - Payout policy in perfect capital markets Respond...Ch. 16 - Prob. 15PSCh. 16 - Repurchases and the DCF model Hors dAge...Ch. 16 - Repurchases and the DCF model Surf Turf Hotels is...Ch. 16 - Repurchases and the DCF model House of Haddock has...Ch. 16 - Repurchases and the DCF model Little Oil has 1...Ch. 16 - Repurchases and EPS Many companies use stock...Ch. 16 - Dividends and value We stated in Section 16-3 that...Ch. 16 - Payout and valuation Look back one last time at...Ch. 16 - Dividend clienteles Mr. Milquetoast admires Warren...Ch. 16 - Prob. 24PSCh. 16 - Payout and taxes Which of the following U.S....Ch. 16 - Prob. 26PSCh. 16 - Prob. 27PSCh. 16 - Prob. 28PSCh. 16 - Dividend policy and the dividend discount model...Ch. 16 - Prob. 30PS
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- Taxes affect many financial decisions. Explain how (a)interest and dividend payments are treated for tax purposes, from both a company’s and an investor’s perspective, and (b) how dividends and capital gainsare treated for tax purposes by individuals. In youranswers, explain how these tax treatments influencecorporations’ and investors’ behaviorarrow_forwardIn countries which has low rate of tax collection, what will be its effect on business/entrepreneurs.arrow_forwardHow would an increase in corporate taxes tend to affect an average firm’s capitalstructure? What about an increase in the personal tax rate?arrow_forward
- What tax treatment do individual investors generally prefer in stock redemptions? Why?arrow_forwardFederal Income Tax I How does the cash basis method of accounting benefit small business owners, if at all? Under what condition would the cash method of accounting be advantageous as compared with using the accrual methods? Explain. Using your knowledge of GAAP and financial reporting, list and explain one good reason that GAAP should not be used for tax purposes and one good reason that it should be used.arrow_forwardWhy income tax is higher than corporate tax around the world?arrow_forward
- Discuss problems about “Income tax rate is too high” in a country? What solutions can be done to solve it?arrow_forwardWhy is the personal income tax considered less stable than a consumption tax and how do U.S. corporate income taxes favor debt financing over equity financing for business expansion? In addition to this, what are the common criticisms of California’s Proposition 13?arrow_forwardWhich of the following is an argument for the relevance of dividends? High dividends are a signal of financial strength. Personal taxes differ between income and capital gains. Some investors’ preference for current income. All of the above.arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
Dividend explained; Author: The Finance Storyteller;https://www.youtube.com/watch?v=Wy7R-Gqfb6c;License: Standard Youtube License