Difference between the total corporate plus personal taxes

Assignment Help Accounting Basics
Reference no: EM133070936

Question - Suppose that Congress sets the top personal tax rate on interest and dividends at 43% and the top rate on realized capital gains at 17%. The corporate tax rate stays at 25%. Assume capital gains are half of equity income.

a. Compute the difference between the total corporate plus personal taxes paid on debt and the total taxes on equity income if all capital gains are realized immediately.

b. Compute the difference between the total corporate plus personal taxes paid on debt and the total taxes on equity income if all capital gains are deferred forever.

Reference no: EM133070936

Questions Cloud

Were your recommendations the same for each method : The first project is a $250,000 investment in pollution abatement equipment. Were your recommendations the same for each method? Why or why not
Business executives perceptions of ethical leadership : Review the article by Marsh titled "Business Executives' Perceptions of Ethical Leadership and its Development" Allocating Human Resources to Projects
Determine what vacation pay is accrued : Gill worked full-time for his employer for almost 2 years before deciding to resign. Determine what vacation pay is accrued
Develop supporting human resource plan : You will develop a supporting human resource (HR) plan for an organizational strategy.
Difference between the total corporate plus personal taxes : Compute the difference between the total corporate plus personal taxes paid on debt and the total taxes on equity income if all capital gains are realized
Should john purchase the new machine : A Ltd currently has a financial leverage of 30%, with total assets of $250 000. Should John purchase the new machine
How many short boards and how many long boards max make : Assume the markets for both types of surfboards are unlimited. How many Short boards and how many Long boards should Max make each month
Explain to the nurse manager why this seemingly easy change : Explain to the nurse manager why this seemingly easy change was met with such resistance. Is there anything the nurse manager can do at this stage to address
Organization or culture before and after the shift : Describe the organization or culture before and after the shift. Has the shift been successful or did the shift fail?

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