Answer:
At a corporate tax rate of 16.29%, both investment shall have same income, so it will be the indifference point.
Explanation:
Let take X to be the corporate tax rate
Note that 70% dividend exclusion for tax on dividend mean 30% is actually applied to dividend
Preferred dividend = 5000 * 7.75% = 387.5
Taxable dividend = 387.5 * 30% = 116.25
Interest on bond = 5000*10% = 500
For the purpose of Indifference of the two investment brought about by the two break-even corporate tax
387.5 - 116.25 * X = 500 - 500*X
500 X - 116.25 X = 500 - 387.5
383.75 X = 175
-112.5
383.75 X = 62.5
X= 62.5/383.75
X= 0.1629
X=16.29%
At a corporate tax rate of 16.29%, both investment shall have same income, so it will be the indifference point.
The Federal Reserve System is designed to regulate the money supply in our country. Answer is C
Answer:
Money serves several functions: a medium of exchange, a unit of account, a store of value, and a standard of deferred payment.
Answer:
d. Is reflected in income from continuing operations.
Explanation:
Taxes are defined as the amount that is levied by a government on its citizens, the funds are used to fund government expenditure.
When a business's tax rate increases the extra cost that results will be recognised as an expense in the income from operations.
On the other hand when tax rate is reduced it will result in increased income for the business.
Tax is one of the factors businesses consider when setting up operations. Locations with low tax rates are more favoured as they result in higher income.
Answer:
Option (2) is correct.
Explanation:
A supply curve is a graphical representation of quantity supplied of a commodity at every price level. The law of supply states that there is a direct relationship between the price of the product and the quantity supplied of the product.
This is one of the main reason of upward sloping supply curve. This means that as the price of a product increases then as a result the quantity supplied for that good also increases.
Demand curve is a downward sloping curve which shows that there is an inverse relationship between the price of the good and the quantity demanded for that good.