How much better off would Egret Corporation be

Assignment Help Accounting Basics
Reference no: EM132662062

Problem - Decision Making Critical Thinking Communications Kristen, the president and sole shareholder of Egret Corporation, has earned a salary bonus of $30,000 for the current year. Because of the lower tax rates on qualifying dividends, Kristen is considering substituting a dividend for the bonus. Assume that the tax rates are 24% for Kristen and 21% for Egret Corporation.

Required -

a. How much better off would Kristen be if she were paid a dividend rather than salary?

b. How much better off would Egret Corporation be if it paid Kristen a salary rather than a dividend?

c. If Egret Corporation paid Kristen a salary bonus of $35,000 instead of a $30,000 dividend, how would your answers to parts (a) and (b) change?

d. What should Kristen do? Summarize your conclusion in a two- to three-paragraph e-mail to your instructor.

Reference no: EM132662062

Questions Cloud

What income tax liability would Julio incur : What income tax liability would Julio incur on the $150,000 payment in each of the following situations? Assume that Julio has no capital losses
How would you integrate the organization into your work : Research their current role in youth work, development, value messages and services. What advantages does the organization you selected offer to the youth.
What is the variable maintenance cost per unit for alisha : What is the variable maintenance cost per unit for Alisha Limited. What is the total maintenance cost incurred by Alisha last year?
Describe business perspective for diversity management : Describe the business perspective for inclusion of diversity management in a health care environment. Include how diversity management has been addressed.
How much better off would Egret Corporation be : How much better off would Egret Corporation be if it paid Kristen a salary rather than a dividend
Health care leader interface with local : How should a health care leader interface with local, state, or nationally elected officials to create a dialogue concerning local health care challenges?
What is a maturity bucket in the repricing model : What is a maturity bucket in the repricing model? Why is the length of time selected for repricing assets and liabilities important when using the repricing
Analyse crypto-currency trading data : Implement a system to explore and compare a variety of ADT implementations - analyse crypto-currency trading data. You will be downloading and reading
What can be concluded from john and mary work : OCI, whereas Mary decides to record the gain on her plan's revaluation into her company's net income. What can be concluded from this?

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