Multiple Choice: Problems New Business is just being formed by 10 investors, each of whom will own 10% of the business. The firm is expected to earn $500,000 before taxes each year. The corporate tax rate is 34% and the personal tax rate for the firm's investors is 35%. The firm does not need to retain any earnings, so all of its after-tax income will be paid out as dividends to its investors. The investors will have to pay personal taxes on whatever they receive. How much additional spendable income will each investor have if the business is organized as a partnership rather than as a corporation?
A. $11,050
B. $12,266
C. $10,056
D. $9,282
E. $11,713
Answer: A
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A. humane orientation B. institutional collectivism C. in-group collectivism D. assertiveness
All of the following scenarios illustrate a reason why a firm would eliminate an item within a product line except
A. the firm must respond to evolving markets. B. the firm has decided to capture new markets. C. the firm decided to refocus marketing efforts elsewhere. D. the product being eliminated is unprofitable. E. the product undermined its own brand.
The time value of money reflects the fact that:
A. spontaneous financing is a particularly important source of financing for small businesses. B. it is best to have money today, so it can be put to work sooner to make even more money. C. a covenant requires the borrower to agree not to borrow any additional funds until the specified length of the current loan. D. long-term investments are more profitable than short-term investments.
American investors can participate in international stock markets by
A) purchasing shares in a mutual fund that invests in foreign companies. B) purchasing shares of a U.S. based company such as Coca Cola or McDonald's with extensive international operations. C) purchasing ADSs (American Depositary shares). D) all of the above.