Assuming that the issue is fully subscribed, or sold, which method would generate the most capital for the issuing firm
1 answer:
Answer:
Best effort sale
Explanation:
In the case when the issue is either fully sunscribed or sold so the method than generate the more capital for the firm i.e. issue is best effort sale
But before that we have to compute the weighted average price i.e.
= $32 × 0.2+ $36 × 0.3 + $42 × 0.5
= $6.4 + $ 10.8 + $21
= $38.2
As the weighted average price is more than the $36 so the best effor sale should be selected
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The amount of tax paid less by Caroline as per the new taxation policies will be $950 over her annual salary of $42,200 after the taxes are applied assuming deductions being made.
The calculation of tax saved by Caroline will be done on the basis of comparing the taxation rates of both the policies after taking the changes into account.
<h3>Calculation of tax savings</h3>The formula for calculation of tax will be done as follows when the taxes are charged on flat basis under the old policy,
The taxation for the first $20000 as per the new policy will be
Calculating further taxation,
So, total taxation as per the new policy will be $9600. Now comparing the taxation of old scheme with new scheme, we get,
So, the total taxes saved are $950 when the taxation rate changes.
Hence, the correct statement is that tax savings of $950 is possible when the authorities change the taxation rates to such slab rates by Caroline.
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