The above is an example of property rights facilitating exchange.
<h3>What is property right?</h3>
This refers to the legal right to own a property whether or not they are tangible or intangible.
Property rights enables one to do the following:
- A person has the authority to own a property.
- The property can be used within the law as he deemed fit.
- Receive any income that the property generates.
Hence, the above is an example of property rights facilitating exchange.
Learn more about property rights here: brainly.com/question/913138
#SPJ1
Answer:
10.2%
Explanation:
Total annual dividends $2,500,000
the actual dividends received deduction is 80%, but since the question states that it is 70%, we must subtract 70% of $2,500,000 = $750,000
the company will be taxed only on $750,000 of dividends that it received:
total taxes paid = $750,000 x 34% = $255,000
effective tax rate = total taxes paid / total dividends received = $255,000 / $2,500,000 = 10.2%
A debt-free firm has a net income of $71,600, taxes of $31,500, and depreciation of $11,000 so the net cash flow is $78400
Depreciation refers to two aspects of the same concept: first, the actual decrease in the fair value of the asset, such as the decrease in the value of plant equipment each year as it is used. and depreciation, and secondly, the allocation on the statement of the historical cost of the asset over the useful life of the asset (allocation according to the principle of attachment).
Thus, depreciation is the decrease in value of an asset and the method used to reallocate or "depreciate" the cost of a tangible asset (such as equipment) over its useful life. its use. Companies depreciate long-lived assets for accounting and tax purposes.
learn more about depreciation here; brainly.com/question/25806993
#SPJ4
Answer:
Data for Question
<u>Debt</u> <u>Book Equity</u> <u>Market Equity</u> <u>Operating Income</u> <u>Interest Expense</u>
Firm A
500 300 400 100 50
Firm B
80 35 40 8 7
1.
Market debt-to-equity ratio = Debt of Firm / Market Equity
Firm A = 500 /400 = 1.25
Firm B = 80 / 40 = 2
2.
Book debt-to-equity ratio = Debt of Firm / Book Equity
Firm A = 500 /300 = 1.67
Firm B = 80 / 35 = 2.29
3.
Interest coverage ratio = Operating Income / Interest Expense
Firm A = 100 /50 = 2
Firm B = 8 / 7 = 1.14
4.
Firm B will have more difficulty meeting its debt obligations because it has higher debt equity ratio and lower interest coverage ratio than Firm A.