What is the effective tax rate on the inter company

Assignment Help Finance Basics
Reference no: EM13943570

A parent holding company sells shares in its subsidiary such that the parent now owns only 65% of the subsidiary and, thus, the tax returns of the parent and its subsidiary can't be consolidated. The parent receives annual dividends from the subsidiary of $2,500,000. If the parent's marginal tax rate is 34% and if the exclusion on inter company dividends is 70%, what is the effective tax rate on the inter company dividends, and how much net dividends are received?
a.10.2%; $2,245,000
b.10.2%; $2,135,000
c.23.8%; $1,905,000
d.10.2%; $1,750,000
e.34.0%; $1,650,000 

Reference no: EM13943570

Questions Cloud

Calculate the projects coefficient of variation : Calculate the project's coefficient of variation. (Hint: Use the expected NPV.) Squared dev. Prob. NPV NPVi - E(NPV) Squared deviation times probability 0.24 $6,289.81 $5,829 $ $ 0.24 -$2,390.74 -$2,852 $ $ 0.32 -$1,233.33 -$1,694 $ $ 0.20 -$ 400.00 ..
Investment in operating capital and no interest expense : Juicers Inc. is thinking of acquiring Fast Fruit Company. Juicers expects Fast Fruit's NOPAT to be $9 million the first year, with no net new investment in operating capital and no interest expense. For the second year, Fast Fruit is expected to have..
Antitakeover measures primarily protects : Antitakeover measures primarily protects _________________
What is the degree of operating leverage : What is the break-even point in bags? What is the degree of operating leverage at 19,000 bags and at 24,000 bags? Why does the degree of operating leverage change as the quantity sold increases?
What is the effective tax rate on the inter company : What is the effective tax rate on the inter company dividends, and how much net dividends are received?
Importance of leadership roles-corporate greening : The assignment is based on a discussion piece that highlights a number of points such as the importance of leadership roles relating to corporate greening in creating the sustainable future for the organisation. Students are expected to engage in ..
Whats the biggest threat in uae : Whats the biggest threat in UAE - it could relate on the countries economy or fighting terrorism
Add two more files to mortgage calculator program : Add two more files to Mortgage calculator program. Mortgage calendar Class and Mortgage array Class.
Describe two system variables in the ronald cotton case : Provide an analysis of the Ronald Cotton case, and include the following: Describe two system variables in the Ronald Cotton case. Explain the significance of each system variable as it relates to the case

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the opportunity cost of adding petite sizes

The cost of identical machines with a life of 9 years is $1.93 million. Assume the opportunity cost of capital is 8 percent. What is the opportunity cost of adding petite sizes.

  Your firm is contemplating the purchase of a new 580000

your firm is contemplating the purchase of a new 580000 computer-based order entry system. the system will be

  Discuss the advantages and disadvantages of models

Discuss the advantages and disadvantages of models used to assess risk exposure. Which of the disadvantages might be the most problematic?

  Role of government in international trade

Explain the role of government in international trade, the various levels of economic integration, and the impact on international marketing.

  Take into consideration price, tax, registration

First, you need to decide on your budget, which is the maximum you can spend on a car, and that maximum number should take into consideration price, tax, registration, and fixing if needed.

  Why ebit is generally considered to be independent of

why ebit is generally considered to be independent of financial leverage? why might ebit actually be influenced by

  What amount of new common stock must be sold

What amount of new common stock must be sold if the existing capital structure is to be maintained?

  What factors and incentives motivate companies management

what factors and incentives motivate companies management to engage in earnings

  Fauver enterprises declard a 4 for 1 stock split last year

fauver enterprises declard a 4 for 1 stock split last year andthis year its dividend is 1.10 per share. this total

  Can you make money via triangular arbitrage if you can show

you walk into an international bank with 1000 and observe the following exchange

  What do you think the beta of your portfolio would be if

what do you think the beta of your portfolio would be if you owned half of all the stocks traded on the major

  What can financial statement ratios tell the fscj business

What can financial statement ratios tell the FSCJ business student/employment candidate about the suitability of the organization as an employer?

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!

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