Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
A TV pundit claims that a proportional income tax does not satisfy horizontal equity, because it places different burdens on individuals with the same lifetime income:
A. Construct a simple 2-period, 2-person example, showing how a proportional in- come tax places different burdens on individuals with the same lifetime income.
B. Why does the violation of horizontal equity arise?
C. Do consumption taxes face the criticism of the TV pundit? Explain
D. In what other dimension might consumption taxes be considered “unfair”?
Fama’s Llamas has a weighted average cost of capital of 10.3 percent. The company’s cost of equity is 12 percent, and its pre-tax cost of debt is 8.3 percent. The tax rate is 38 percent. What is the company’s target debt and equity ratio?
Insurer X insures a large number of small property accounts with average premiums of $1,000. The policies range from a low of $600 to a high of $1,400 premium. Insurer X wants to grow but is inhibited by statutory surplus requirements. As the re-insu..
Consider an 7.5% coupon bond selling for $966.10 with 3 years until maturity making annual coupon payments. The interest rates in the next 3 years will be, with certainty, r1 = 7%, r2 = 8%, and r3 = 10%. Calculate the yield to maturity and realized c..
Waterford Industries is considering the purchase of a new machine. It will replace an existing but obsolete machine that will be sold for $50,000. What is the after-tax salvage value of the old machine?
If a firm buys on trade credit terms of 2/10, net 75 and decides to forgo the trade credit discount and pay on the net day, what is the annualized cost of forgoing the discount (assume a 360-day year)? The annualized cost of the trade credit terms of..
A borrower is approved for a $80000 mortgage loan at 12% interest with monthly payments over 30 years. The borrower is required to pay 3.5 points. Assume the borrower repays the loan after 5 years. What is the effective borrowing cost?
Based on analysis of the company and expected industry and economic conditions, China imports is expected to earn 4.60 per share of common stock next year. The average price/earnings ratio for firms in the same industry is 8. Calculate the estimated ..
Credit Sales increase?
What happens to the present value of a series of cash flows (increase or decrease) as the number of payments (length of time) increases, holding all other factors constant? Does the change occur at a constant rate or at a varying rate? How do we hand..
What is the value of a perpetuity that pays $100 every 6 months forever? The discount rate quoted on an APR basis is 6.5%.
Stock Expected Return (rs) Beta. What is the portfolio’s expected return? What is the portfolio’s beta risk? Is it more or less risky than the market? The investor is not comfortable with holding a portfolio that has a risk not equal to that of the m..
Cash discount versus loan. Joanne Germano works in an accounts payable department of a major retailer. She has to convince her boss to take the discount on the 1/15 net 65 credit terms most suppliers offer, but her boss argues that giving up the 1% d..
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd