This statement is true. The amount the shareholder has paid
for the stock he owns is the amount of potential loss he can incur as a result
of being an owner in a corporation. The creditor of the company cannot run to
the personal properties of each shareholder. This condition makes the
corporation differ from partnership.
Answer:
Answer for question :
The recent dividend payout by IBM was $3.00. IBM's dividends are expected to grow about 6.5% per year. If your required rate of return is 17%. What is the expected stock price two years from now. Round the answer to the nearest integer " is as explained below.
Explanation:
1. the expected stock price two years from now = 3 * 1.065^3/(0.17 - 0.065)
the expected stock price two years from now = 34.51
2. FV = 0, N = 8, PMT = 288, rate = 4%
use PV funciton in Excel
value at time 0 = 1939.03
Answer:
= $115,559.84
Explanation:
The MACRS represents Modified Accelerated Cost Recovery System and it represents a depreciation method that is accepted for taxation purpose in the United States. The MACRS allows an asset's capitalized cost's recovery over a period of time based on annual deductions.
From the question, the fixed asset was purchased for $139,700
the MACRS rate to use at the end of 4 years = 0.2, 0.32, 0.192 and 0.1152
The accumulated depreciation therefore,
= (0.2+0.32+0.192+0.1152) x $139,700
= $115,559.84
Answer:
5.80%
Explanation:
Computation of after-tax return
Based on the information given the total before-tax income will be $3.
Since the firm is in the 30% tax bracket this means that the taxable income will be calculated as:
Taxable income =(0.30 ×$3)
Taxable income = $0.9
The next step is to calculate for the Taxes
The taxes will be = (0.30 ×$0.9) = $0.27
Now let calculate for the After-tax income
After-tax income = ($3 - $0.27) = 2.73
The last step is to find the After-tax rate of return using this formula
After-tax rate of return =After-tax income/Share of preferred stock
Let plug in the formula
After-tax rate of return = ($2.73/$47)
After-tax rate of return=0.058×100
After-tax rate of return = 5.80%
Therefore After-tax rate of return will be 5.80%
