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Question: Biolsi Corporation, a C corporation, has two equal shareholders, Donna and Ashley. Biolsi earned $300,000 net profit during the current year and distributed $150,000 to each shareholder (total of $300,000). Biolsi has a total of $150,000 of Earnings and Profits. Donna's basis in her stock is $100,000 and Ashley's basis in her stock is $50,000. Donna sells her stock in 2015 for $200,000. Assume that Biolsi's tax rate is 30% . Also assume that Donna's and Garbriela's marginal tax rate are 25% therefore the dividend rate would be 15%.
What is the impact based on these facts to Biolsi, Donna and Ashley?
How would your answer change if this was an S corporation? Note, that with an S Corp, net income increases the basis of the shareholders therefore Donna's basis would be $250,000 and Ashley's basis would be $200,000. Explain your answer.
You are deciding whether to own or rent a single family residence. You could rent the property for $3,100 a month, or you could buy the property for $550,000.
what is the contrast between the successful rate of interest and expressed rate of enthusiasm for the accompanying cases
Also explain what you think is the main 'message' of the Capital Asset Pricing Model to corporations and what is the main message of the CAPM to investors?
This morning, TL Trucking invested $75,000 to help fund a company expansion project planned for 4 years from now. How much additional money will the firm have 4 years from now if it can earn 5 percent rather than 4 percent on its savings?
Suppose a firm makes purchases of $3.6 million per year under terms of 2/10, net 30, and takes discounts.
this project would require an initial cash outlay of 5500000 and would generate annual net cash inflows of 1100000 per
ABC Inc. is considering a project with an initial cost of $1,333. The project will not produce any cash flows for the first four years.
Suppose you just won the state lottery, and you have a choice between receiving $2,550,000 today or a 20 year annuity of $250,000, with the first payment coming one year from today. What rate of return is built into the annuity? Disregard taxes.
Since its inception, Eco Plastics Company has been revolutionizing plastic and trying to do its part to save the environment. Eoc s founder, Marion Cosby, developed a biodegradable plastic that her company is marketing to manufacturing companies t..
Commerce National Bank reports interest-sensitive assets of S870 million and interest-sensitive liabili-ties of $625 million during the coming month.
It is expected to grow at 15% over the next year and then at 5% per year thereafter. The required rate of return on the stock is 8%.
How do "Reduced information costs in turn lower transaction costs, thereby facilitating price discovery and enhancing market liquidity"?
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