How much will the total income available to stockholders

Reference no: EM13262062

Assume that Western Exploration Corp. is considering the acquisition of Ogden Drilling Company. The latter has a $510,000 tax loss carryforward. Projected earnings for the Western Exploration Corp. are as follows:

	2011		2012		2013		Total values
Before-tax income	$	195,000	$	270,000	$	390,000	$	855,000
Taxes (40%)		78,000		108,000		156,000		342,000

Income available to stockholders	$	117,000	$	162,000	$	234,000	$	513,000

(a)

How much will the total taxes of Western Exploration Corp. be reduced as a result of the tax loss carryforward? (Omit the "$" sign in your response.)

(b)

How much will the total income available to stockholders be for the three years if the acquisition occurs? (Omit the "$" sign in your response.)

Reference no: EM13262062

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