Answer:
The cost of equity for Neal Enterprises is 5%
Explanation:
In order to calculate the cost of equity for Neal Enterprises we would have to make the following calculation:
cost of equity=((Do(1+g)/Po)+g
According to givn data we have the following:
Do=$1.20
Po=$36.80
g=2%
cost of equity=((1.20(1+0.02)/36.80-1.20)+0.02
cost of equity=((1.20(1+0.02)/35.60)+0.02
cost of equity=0.05
The cost of equity for Neal Enterprises is 5%
Answer:
B) Transferring interest income from a taxpayer's investment to his young daughter
Explanation:
If you want to pay less taxes there are two basic ways that you can do it:
- moving income (and deductions) to a more favorable tax jurisdiction, e.g. many multinational corporations did this by setting foreign headquarters that managed sales outside the US
- moving income form a tax payer that falls under into a high tax bracket to another taxpayer that falls under a lower tax bracket, e.g. giving stock to your children as a gift
Answer: Mutual funds
Explanation: Mutual fund is a pool of securities in which the assets are purchased by procuring fund from several different investors. Mutual funds includes different type of securities so that diversification benefits could be taken. These are generally managed by investment professionals.
Generally mutual funds include stock, bonds and debt. Thus, an investor seeking diversified portfolio can seek for mutual funds.
