Tax liability on its ethiopian subsidiary

Assignment Help Financial Management

Reference no: EM131980590

Tailor? Johnson, a U.S. maker of fine? menswear, has a subsidiary in Ethiopia. This? year, the subsidiary reported and repatriated earnings before interest and taxes? (EBIT) of 140 million Ethiopian birrs. The current exchange rate is 9.6046 birrs/dollar or S=$0.1041/birr.

The Ethiopian tax rate on this activity is 21%. U.S. tax law requires Tailor Johnson to pay taxes on the Ethiopian earnings at the same rate as on profits earned in the United? States, which is currently 39%.

?However, the United States gives a full tax credit for foreign taxes paid up to the amount of the U.S. tax liability. What is Tailor? Johnson's U.S. tax liability on its Ethiopian?subsidiary?

Tailor? Johnson's U.S. tax liability on its Ethiopian subsidiary is $___million. ? (Round to two decimal? places.)

Reference no: EM131980590

Questions Cloud

Shares of common stock outstanding : What is the firm's total book value? What would its book value per share be if the firm had 25,000 shares of common stock outstanding?

Describe how laws or regulations affect your past : Describe how laws or regulations affect your past or current job or industry.

Combined corporation immediately after merger is? completed : What is the price per share of the combined corporation immediately after the merger is? completed?

What are the monthly payments in the first two years : A mortgage broker is offering a $193,900 25-year mortgage with a teaser rate. What are the monthly payments in the first two years?

Tax liability on its ethiopian subsidiary : Tailor? Johnson, a U.S. maker of fine? menswear, has a subsidiary in Ethiopia. Tailor? Johnson's U.S. tax liability on its Ethiopian subsidiary is $___million.

Define the two components of stock price : Define the two (2) components of stock price. Are both components always a factor for every stock? Why?

Determine what the stock dividend yield : Compute the stock's earnings per share (EPS). Determine what the stock's dividend yield would be if it paid $4.77 per share to common stockholders.

Find the values-compounding and discounting occurs annually : Find the following values using the equations and then a financial calculator. Compounding/discounting occurs annually.

What is portfolio standard deviation and portfolio weights : What is the portfolio’s standard deviation? what are the portfolio weights?

User Account

All Pages