Reference no: EM131217095
Suppose that the tax rate on personal income, tp, is equal to 40%; the corporate tax rate, tc, is equal to 35%; and the capital gains tax rate, tcg, is 20%. Also assume that the before-tax rate of return on investment to both the corporate and partnership form is 15% per year. These tax rates and investment returns are constant over time. On the basis of these facts, identify the following as true or false. (Support your answers with numerical examples.)
a. The annualized after-tax rate of return to investing in the corporate form increases with the length of the investor’s holding period. Explain.
b. The annualized after-tax rate of return to investing in the partnership form increases with the length of the partner’s holding period. Explain.
c. If a corporation paid out its entire after-tax profits as fully taxable dividends each year, shareholders would realize a lower before-tax rate of return than if the corporation retained the after-tax profits. Explain.
d. Because the corporate tax rate is below the personal tax rate, the corporate form is always preferred to the partnership form.
e. Because corporate income is subject to two levels of taxation, the partnership form is always preferred to the corporate form.
|
Interest in studying sports management
: Explain your interest in studying Sports Management and what you expect to learn.
|
|
Prepare a business impact analysis on sangrafix a video game
: Create business impact analysis on SanGrafix a video game design company. The BIA should include a descriptive list of the organization's key business areas. The BIA helps to identify and prioritize critical IT systems and components.
|
|
Role that challenge administrators play in the osha
: Describe the role that Challenge Administrators play in the OSHA? Describe the role that Challenge Administrators play in the OSHA Challenge voluntary cooperative program?
|
|
Write an analytical report to your division manager
: Write an analytical report to your division manager, Anne Brown, that will discuss PR options and state a recommended strategy.
|
|
Tax rates and investment returns are constant over time
: Suppose that the tax rate on personal income, tp, is equal to 40%; the corporate tax rate, tc, is equal to 35%; and the capital gains tax rate, tcg, is 20%. Also assume that the before-tax rate of return on investment to both the corporate and partne..
|
|
Employee counseling programs
: Describe the typical activities included in employee counseling programs. Is there really a need for employee counseling
|
|
Plot the langevin function using various parameters
: Computer problem. Plot the Langevin function using various parameters. For which values of H does one obtain saturation magnetization?
|
|
Equivalent of a short paper
: Journal entries should be considered the equivalent of a short paper. You are to answer a question on a topic and even express your opinion.
|
|
Retirement account by investing the funds in corporate bonds
: A taxpayer is about to receive a $1,000 bonus payment from his employer. He would like to put this bonus into a retirement account. He has come to you for advice as to whether he should put the $1,000 into a traditional deductible IRA or a Roth IRA a..
|