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2 years ago

Keys Corporation's 5-year bonds yield 5.10% and 5-year T-bonds yield 4.40%. The real risk-

Business

1 answer:

alexdok [17]2 years ago

4 0

Answer:

.20

Explanation:

=> r(corp) = rf + ip + Ip + drp + mrp , so 5.10% = 2.50% + 1.50% + 0.50% + drp + [(5-1) * 0.1]%, now solving the equation for drp, we get = 5.10 - 2.50 -1.50 -0.50 - 0.4 = 0.20%

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Likurg_2 [28]

Answer:

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Explanation:

Step 1 of 3

Tax treatment of amount distributed to shareholders:

The amount received as distribution to a shareholder under S Corporation is equal to the cash and fair market value of property distributed. The distribution is considered as tax-free to the limit that it does not exceed shareholder’s basis in the company’s stock. Any amount received in excess of basis will be treated as capital gain.

Step 2 of 3

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Step 3 of 3

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