Answer:
Yes, it will affect it.
Explanation:
The dividends received deduction (DRD) refers to a US federal tax law that allows some corporation that are paid dividend by related entities to deduct certain percentage of the dividend received from their income tax depending on their percentage of ownership of the related entity that paid the dividend.
The three criteria or tiers that determines how much to deduct as DRD are as follows:
1. Generally, the DRD a corporation is qualified for is 70% of the dividend received.
2. A DRD equals to 80% of the dividend received can be deducted if the corporation holds more than 20% but less than 80% shareholding of the company that paid the dividend.
3. If the corporation holds more than 80% shareholding of the company that paid the dividend, a DRD of 100% of the dividend applies.
Therefore, additional stock purchase will affect the amount of dividends received deduction that Mustard can claim.
Answer:
COnsider the following calculations
Explanation:
1. $
Annual Savings in Part-time help 6300
Added Contribution Margin from expanded sales 2600x1.50 3900
Annual Cash Inflows 10200
2.
NPV @ 5%
= Present Value of Cash inflows - Present Value of Cash outlfows
= [10200x 5.076] - 47300
= $4475
NPV @ 10%
= Present Value of Cash inflows - Present Value of Cash outlfows
= [10200x4.355] - 47300
= -$2779
Internal Rate of Return = Lower Rate + [Lower rate NPV/ (Lower rate NPV - Higher rate NPV] x Difference in rates
= 5 + [4475 / (4475+2779)] x 5
= 8%
3. NPV @ 5%
= Present Value of Cash inflows - Present Value of Cash outlfows
= [(10200x 4.355) + (12000x0.564)] - 47300
= $3889
NPV @ 15%
= [(10200x 3.784) + (12000x0.432)] - 47300
= -$3519
Internal Rate of Return = Lower Rate + [Lower rate NPV/ (Lower rate NPV - Higher rate NPV] x Difference in rates
= 10 + [3889 / (3889+3519)] x 5
= 13%
Answer:
a. $510.000
b. $22.500 gain
c. $16.785 gain
Explanation:
a. Kevin bought in total 1750 shares, and for it he spent $510.000
So 1 share is $291,43
b. He bought 500 shares 12.12.2018 for $140.000, then he sold those 500 shares for $162.500. Difference is the gain of $22.500
c. Not knowing from which batch of shares did he sell his shares we already know that avg 1 share is $291,43, so 500 share is $145.715 and he has sold 500 shares for 162.500. Difference is the gain of $16.785
Answer:
C.completeness
Explanation:
Occurrence means transactions and events that have been recorded or disclosed have occurred and relate to the entity.Existence means whether or not accounts balances and related disclosures related Assets, liabilities and equity interests exist in the financial statements.
Completeness means there are no unrecorded transactions, events and disclosures and all transactions that have occurred has been included in the general ledger/financial statements
Valuation or allocation means that assets, liabilities and equity interests are included in the financial statements at appropriate amounts and any resulting valuation or allocation adjustments are appropriately recorded and related disclosures have been appropriately measured and described.
In this question, interest on sample of paid notes have been traced to the general ledger account, to check that whether the interest on the selected sample has been included in the general ledger and financial statements.Thus the answer shall be C.completeness
Answer:
The risk premium on the risky investment is 8%
Explanation:
The first portfolio pays 15% rate of return with probability 60% in a good
The second portfolio 5% return with probability 40% in a bad state
The risk port-folio expected return = 60% * 15% + 40% * 5%
Expected return = 0.6 * 15% + 0.4* 5%
Expected return = 0.09 + 0.02
Expected return = 0.11
Expected return = 11%
Risk premium on the risky investment = Expected return - Risk free rate
= 11% - 5%
= 8%
The risk premium on the risky investment is 8%
