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puteri [66]
3 years ago
7

Juanita owns 60% of the stock in a C corporation that had a profit of $200,000 in the current year. Carlos owns a 60% interest i

n a partnership that had a profit of $200,000 during the year. The corporation distributed $45,000 to Juanita, and the partnership distributed $45,000 to Carlos. With respect to this information, which of the following statements is incorrect?
(a) Juanita must report $120,000 of income from the corporation.
(b) The corporation must pay corporate tax on $200,000 of income.
(c) Carlos must report $120,000 of income from the partnership.
(d)The partnership is not subject to a Federal entity-level income tax.
(e)None of the above.
Business
1 answer:
Ivan3 years ago
4 0

Answer:

The statement which is incorrect or not true is Option A.

Explanation:

Juanita owns 60% of stock in the corporation, so from the profit of $200,000 in the current year, she should report

= $200,000 × 60%

= $120,000

But the Corporation distributed $45,000 to Juanita. Therefore, she should report only $45,000 for this year not $120,000.

Therefore, the first option is incorrect.

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4 years ago
A stock has a required return of 11%; the risk-free rate is 7%; and the market risk premium is 4%.
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Answer:

The Beta is 1

The required return increases to 13%

Explanation:

The formula for required return is given below:

Required Return = Risk-Free Rate of Return + β(Market Return – Risk-Free Rate of Return)

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risk-free rate of return=7%

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beta=4%/4%

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required return=7%+1(6%)

required return =13%

This implies that the riskier the stock, the higher the market risk premium, the higher the required return to investors.

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3 years ago
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4 years ago
Read 2 more answers
The weather station model performs the invaluable function of ____________.
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Answer:

Option B                                    

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