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Rama09 [41]
1 year ago
15

Assume that Microsoft has no debt, a total market value of $300 billion, and a marginal tax rate of 21%. If it permanently chang

es its leverage from no debt by taking on new debt in the amount of 13% of its current market value, what is the present value of the tax shield it will create
Business
1 answer:
Sphinxa [80]1 year ago
5 0

The presence value of tax shield is =522,000,000

<h3>What is Tax shield?</h3>

Tax shields is calculate by substraction cash flow form two different sessions.

To determine the present value for first session

Market value = $300 billion

Tax rate = 20%

Debt = 0

Tax payable= Tax rate/100% * Market Value

Tax payable = 20/100× $300 billion

= 600,000,000

To get present value of tax

Market value = $300 billion

Tax rate = 20%

Debt = 13% of $300 billion

= 390,000,000

Present Market Value = $300 billon - 390,000,000

= 2,610,000,000 i.e $2.6billion

Tax payable = 20/100 × $2.6 billion

=522,000,000

Learn more on tax shield here,

brainly.com/question/13932912

#SPJ1

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A decrease in the inventory account during the year should be reported on the indirect method statement of cash flows as?
mylen [45]

A decrease in the inventory account during the year should be reported on the statement of cash flows as in financing activities as a use of funds.

What is in a cash flow statement?

On the cash flow statement, the entire amount of cash and cash equivalents that enter and exit a business are displayed. The CFS focuses on a company's ability to manage its cash, particularly how successfully it produces cash flow. The income statement and balance sheet both receive information from this financial statement.

What is financing activities in cash flow statement?

The cash flow statement's financing activity describes a company's capacity to raise capital and return it to investors via capital markets. The issuance and sale of additional shares of stock, as well as the growth, addition, and modification of existing debt, are also included in these acts. This list also includes dividend payments made in cash.

Learn more about cash flow statement: brainly.com/question/15278261

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6 0
2 years ago
You were able to purchase two tickets to an upcoming concert for $100 apiece when the concert was first announced three months a
dusya [7]

Answer: $450

Explanation:

Total tickets purchased = 2

The cost of one ticket three months ago = $100

Current price of one ticket = $225

Total cost of two tickets = $225 × 2

                                        = $450

The opportunity cost is the benefit that is foregone by selecting some other alternative. So, here two options are available that either attend the concert or resell the ticket at $450. Therefore, the opportunity cost of attending the concert is $450.

4 0
3 years ago
Maria, a citizen and resident of Mexico, received the following investment income during 2018: $1,000 of dividend income from ow
dmitriy555 [2]

Answer: $6,000

Explanation:

Maria is a citizen and resident of Mexico so the only way the U.S. can tax Maria is by taxing income that is in U.S. jurisdiction before it comes to Maria.

This will include the dividend from ownership of stock in a U.S. Corporation, the interest from a U.S. company issued bond and rental income from a property located in the U.S.

The U.S. will be unable to tax the capital gain from sale of stock however because the sale might not be conducted in the U.S.

Income subject to U.S. taxation is therefore:

= 1,000 + 2,000 + 3,000

= $6,000

8 0
2 years ago
The blurring of lines between the state and a special interest group in which a close alliance develops is called
jeka57 [31]

Answer:

a. co-optation

Explanation:

Co-optation means the things could be taken out or are considered for the new or the different motive

Since the lines are burried and lies between the state and the special interest group in which the close alliance are created so this is we called as the co-optation

Therefore the same should be considered

3 0
3 years ago
BuyStore Inc., an online retail store, sells all of its products through its Web site, buystore, and through an application on c
Anna11 [10]

<u>Full question:</u>

BuyStore Inc, an online retail store, sells all of its products through its Web site, buystore.com, and through an application on cell phones. BuyStore Inc is an example of a _____.

A) brick-and-mortar firm

 B) pure-play company

 C) third-party broker

 D) physical storefront

<u>Answer:</u>

BuyStore Inc is an example of a pure-play company

<u>Explanation:</u>

A pure-play is a company that concentrates on solely one line of business. Pure plays hold easy-to-understand cash flows and earnings and perform to the provision to a recess market. Representing a company as pure-play enables proprietors and administrators to concentrate on some of the core competencies.

Narrowing a company’s center concedes leaders to reduce confusion and to simplify the firm’s individual sales scheme. The pure-play business model enables companies to explore and develop without large investments in local locations or subsidiary offices.

6 0
3 years ago
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