Question
In: Finance
Suppose a firm's tax rate is 35 % . a. What effect would a $ 9.83...
Suppose a firm's tax rate is 35 %
. a. What effect would a $ 9.83 million operating expense have on this year's earnings? What effect would it have on next year's earnings?
b. What effect would an $ 11.55 million capital expense have on this year's earnings if the capital is depreciated at a rate of $ 2.31 million per year for five years? What effect would it have on next year's earnings?
Solutions
Expert Solution
SEE THE IMAGE. ANY DOUBTS,
FEEL FREE TO ASK. THUMBS UP PLEASE
jeff jeffy answered 1 year agoRelated Solutions
Suppose a firm's tax rate is 35%. a. What effect would a $9.85 million operating expense...
Suppose a firm's tax rate is 35%.
a. What effect would a $9.85 million operating expense have on
this year's earnings? What effect would it have on next year's
earnings?
b. What effect would a $9.25 million capital expense have on
this year's earnings if the capital is depreciated at a rate of
$1.85 million per year for five years? What effect would it have
on next year's earnings?
Suppose a firm’s tax rate is 35%. a. What effect would a $7 million operating expense...
Suppose a firm’s tax rate is 35%. a. What effect would a $7
million operating expense have on this year’s earnings? What effect
would it have on next year’s earnings? b. What effect would a $7
million capital expense have on this year’s earnings, if the
capital is depreciated straightline over 5 years? What effect would
it have on next year’s earnings? (Below are all figures in thousand
dollar. Round to nearest thousand. If number is negativ use - ....
Suppose a firm’s tax rate is 25%. a. What effect would a $10 million operating expense...
Suppose a firm’s tax rate is 25%.
a. What effect would a $10 million operating expense have on
this year’s earnings? What effect would it have on next year’s
earnings?
b. What effect would a $10 million capital expense have on this
year’s earnings if the capital is depreciated at a rate of $2
million per year for five years? What effect would it have on next
year’s earnings?
A firm is 65% equity and 35% debt. The firm's marginal tax rate is 40%. Their...
A firm is 65% equity and 35% debt. The firm's marginal tax rate
is 40%. Their bonds trade for $990, mature in nine years, have a
par value of $1,000, a coupon rate of 8.00% and pay semi-annually.
The firm's common stock trades for $27 and just paid a dividend of
$5.00. Dividends are expected to grow at 3% forever. The firm's
after tax cost of debt is _____%.
PLEASE USE FINNACE CALUATLER FOR ANSWER IF NOT USE BASIC
CALUATOR...
Suppose the corporate tax rate is 35%, and investors pay a tax rate of 15% on...
Suppose the corporate tax rate is
35%,
and investors pay a tax rate of
15%
on income from dividends or capital gains and a tax rate of
37.3%
on interest income. Your firm decides to add debt so it will pay
an additional
$20
million in interest each year. It will pay this interest expense
by cutting its dividend.
a. How much will debt holders receive after paying taxes on the
interest they earn?
b. By how much will the...
Suppose the corporate tax rate is 35%, and investors pay a personal tax rate of 25%...
Suppose the corporate tax rate is 35%, and investors pay a
personal tax rate of 25% on income from dividends or capital gains
and a personal tax rate of 32.4% on interest income. Your firm
decides to add debt so it will pay an additional $30 million in
interest each year. It will pay this interest expense by cutting
its dividend.
a. How much will debt holders receive after paying taxes on the
interest they earn?
b. By how much...
if before tax cost of debt rd = 0.12, tax rate (T)=35%, what is the after...
if before tax cost of debt rd = 0.12, tax rate (T)=35%, what is
the after tax cost of debt?
What effect does increasing credit risk have on securities? If I'm at the 35% tax bracket...
What effect does increasing credit risk have on securities?
If I'm at the 35% tax bracket and a muni is paying 4%, what
yield must I get on a taxable to compete?
What factors influence the shape of the yield curve? Can I use
those factors to aid my investing?
What were the most significant changes in this new tax law? What would be the effect...
What were the most significant changes in this new tax
law?
What would be the effect on a business for which you might work
as an engineer
Would there be any changes in the way businesses deal with
depreciation?
A big change in taxes and depreciation also occurred in the
1980s. Research and summarize the effects of the Accelerated Cost
Recovery System (ACRS) on taxes and depreciation. What is your
opinion of ACRS?
What are the main principles of tax effect accounting? In relation to tax effect accounting, what...
What are the main principles of tax effect accounting?
In relation to tax effect accounting, what is a deductible
temporary difference? Give two examples of deductible temporary
differences.
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Describe in detail two modern applications of electromagnets. Do these electromagnets draw a large amount of...
- Refunding Analysis Mullet Technologies is considering whether or not to refund a $250 million, 13% coupon,...
- in java What object is passed to the start method in a JavaFX program? What should...
- QUESTION ONE Briefly explain the following types of errors: (i) Error of commission &n
- List the basic principles of the distillation tower at least 4 principal and why there are...
- Imagine you're a business owner: If waiting in lines is a truly inescapble event for your...
- A piston-cylinder device initially contains 0.20(kg) of steam at 3.5(MPa), 300(C). The steam loses heat to...
ADVERTISEMENT