The fact that 70% of the interest income received by corporations is excluded from its taxable income encourages firms to finance with more debt than they would in the absence of this tax law provision.
Answer the following statement true (T) or false (F)
False
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Suppose that a change in the expected inflation rate leads supply and demand to adjust so that the after-tax expected real interest rate is unchanged at 2.0 percent. The tax rate is 30 percent. Initially, the expected inflation rate is 3.0 percent. If the expected inflation rate rises from 3 percent to 6 percent, the nominal interest rate
A. rises by 3 percent. B. rises by 4.25 percent. C. falls by 4.25 percent. D. falls by 3 percent.
Goodwill can be recorded as an asset when a(n)
a. business has above normal profitability compared to other businesses in its industry. b. business can determine that it has created customer goodwill and name recognition. c. offer is received to purchase the business at a price in excess of the value of the assets. d. business is purchased and payment is made in excess of the value of the net assets.
Lower corporate tax rates are found in
A. Japan. B. Brazil. C. Saudi Arabia. D. the U.S.
There is a growing fear among many people that globalization benefits big companies instead of average citizens.
Answer the following statement true (T) or false (F)