Compare the tax advantages of debt versus equity capital

Assignment Help Accounting Basics
Reference no: EM131032466

Imagine that you are a Certified Public Accountant (CPA) with a new client who needs an opinion on the most advantageous capital structure of a new corporation. Your client formed the corporation in question to provide technology to the medical profession to facilitate compliance with the Health Insurance Portability and Accountability Act (HIPAA). Your client is very excited because of the ability to secure several significant contracts with sufficient capital. Research the advantages and disadvantages of debt for capital formation versus equity for capital formation of a corporation.

1 - Prepare a formal letter to the client using this six (6) step tax research process:

1. Determine the facts;

2. Identify the issues;

3. Locate applicable authorities;

4. Evaluate these authorities;

5. Analyze the facts in terms of applicable authorities;

6. Communicate conclusions and recommendations to others.

2 - Compare the tax advantages of debt versus equity capital formation of the corporation for the client. Recommend to the client whether he / she should use debt or equity for capital formation of the new corporation, based on your research. Provide a rationale for the response. 

Reference no: EM131032466

Questions Cloud

Information about the performance of students : You are interested in obtaining information about the performance of students in your statistics class and seeing how this performance is affected by several factors such as sex.
Age of the mother-marital status of mother : Problem: As part of a data base on new births at a hospital some variables recorded are the age of the mother, marital status of the mother (single, married, divorced, other), weight of the baby, and sex of the baby. Of these variables
What are busses and ports plx : What are busses and ports plx give me some to the point answer for this sir plx
Quantitative analysis for the two companies on profitability : A highlighting of the most important changes within these ratios and an identification of the reasons for these changes. A comparison of the quantitative analysis for the two companies on Profitability, Asset efficiency, Liquidity, Capital structu..
Compare the tax advantages of debt versus equity capital : Imagine that you are a Certified Public Accountant (CPA) with a new client who needs an opinion on the most advantageous capital structure of a new corporation.
How do you get a method from recursing infinitely : How do you get a method from recursing infinitely?  In the example below, It asks for a double value, then another.  The first value must be less than the second value.  If not, it will ask you to enter a double that is less than the second one.  Aft..
Four values aligned to the standards of conduct in pmp : What are the four values aligned to the standards of conduct in pmp? Choose ONE of the values and provide your reasons as to why this value is essential in project voice based email for blind people.
Write paper on the mexican and american war on drugs : Write paper on the Mexican and American War on Drugs - you need to write 800 words.
Physical therapy : Looking for Microsoft Office 2013: Advanced Capstone Project 2 BJM Physical Therapy. Willing to pay whatever is needed for it completed. Need before Sunday 4/24. Anything helps, greatly appreciated.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd