User Account

All Pages

Is Rover correct in believing that a dividend better choice

Assignment Help Accounting Basics
Reference no: EM132661958

Problem - Rover Corporation would like to transfer excess cash to its sole shareholder, Aleshia, who is also an employee. Aleshia is in the 24% tax bracket, and Rover is subject to a 21% rate. Because Aleshia's contribution to the business is substantial, Rover believes that a $25,000 bonus in the current year is reasonable compensation and should be deductible by the corporation. However, Rover is considering paying Aleshia a $25,000 dividend because the tax rate on dividends is lower than the tax rate on compensation. Is Rover correct in believing that a dividend is the better choice? Why or why not?

Reference no: EM132661958

Questions Cloud

What is the true tax rate in mills : If a district requires revenue of $1,526,400 and the sale value of all taxable property is $106,000,000 (to be assessed at 60 percent) what will the tax rate
Different views on the moral obligations of business : This is a graded discussion forum set up for discussing a variety of different issues concerning different views on the moral obligations of business.
Support the implementation of fintech : Q1: What are the factors affecting the implementation of Fintech?
Find what is the total amount expressed on a per unit basis : What is the total amount of manufacturing overhead cost incurred to support this level of production? What is this total amount expressed on a per unit basis?
Is Rover correct in believing that a dividend better choice : Aleshia is in the 24% tax bracket, and Rover is subject to a 21% rate. Is Rover correct in believing that a dividend is the better choice? Why or why not
Economic value of christopher contract : What is the economic value of Christopher's contract on the date it was signed? Assume that the signing bonus was paid on that date
How is the distribution treated for tax purposes : The corporation distributes $50,000 to its sole shareholder, Abby, whose stock basis is $10,000. How is the distribution treated for tax purposes
What should the last two payments be if money : What should the last two payments be if money is worth 9% compounded semi-annually?
Define the key characteristics of nonprofit hospitals : The board of directors of your for-profit hospital has been approached by a nonprofit hospital to consider a joint venture to take over their business resulting

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.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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