Answer:
$4.41
Explanation:
S corporation earns $9.00 per share before tax is paid
Corporate tax rate is 39%
= 39/100
= 0.39
Personal tax rate on dividend is 15%
= 15/100
= 0.15
The rate on non-dividend income is 36%
The company pays $6.00 for dividend
Therefore, the total amount of taxes paid can be calculated as follows
Corporate tax= $9.00×0.39
= $3.51
Personal tax= $6.00×0.15
= $0.90
Total amount of tax paid= corporate tax+Personal tax
= $3.51+$0.90
= $4.41
Hence the total amount of taxes paid is $4.41
Answer:
The price per share of equity is $37.083
Explanation:
The first capital structure is purely equity based and Guld Shores will sell 300000 shares at price x to raise the needed capital.
The second structure is a mixed or leveraged structure where both debt and equity components are involved. The capital that needds to be raised remains constant.
Gulf has to give up 300000 - 252000 = 48000 shares and raise 1.78 million dollars from debt. We assumed that the amount that Gulf will raise is the ame from both th structures. Then 48000 shares at price x are equal to $1.78 million debt.
So, Price per share of equity is,
1,780,000 = 48000x
1780000 / 48000 = x
x or price per share = $37.083
Answer:
$210,000
Explanation:
Calculation to determine the pension expense for the year
Service cost $197,000
Interest cost $39,000
Less Expected return on plan assets ($26,000) ($260,000*10%)
Pension expense $210,000
Therefore the pension expense for the year will be $210,000