1. You have a cash obligation of $132‚240 to be made at the end of year 5. Show how you can use coupon bonds with a coupon rate of 8%‚ a face value of $1‚000‚ a maturity date at the end of year 6‚ and a yield to maturity of 8% to ensure that you can meet your cash obligation at the end of year 5. Suppose that you purchase the bonds at the beginning of year 1 and that the market interest rate changes only once right after you have purchased the bonds. There are three possible interest rates‚ 7.9%
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Tax Research Problem 2-64 FACTS: Lisa and Matthew would like to form a new corporation‚ Lima Corporation. Lisa will be exchanging $50‚000 cash in exchange for 50 shares of stock in Lima. Matthew will be contributing land which has a $35‚000 adjusted basis and a $50‚000 FMV‚ also in exchange for 50 shares of stock in Lima. ISSUE: When assets are exchanged for stock and control in a newly formed corporation‚ what are the tax and financial accounting implications of those transactions to Lisa
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Today‚ Corporate Social Responsibility (CSR) is much wider concept than just donations and philanthropy. It is viewed as a way of doing business‚ identified with the strategies and standards of business conduct that companies follow in their business. While focused on creating shareholder value‚ the companies seem to be equally focused on CSR for various reasons like - attracting socially responsible investors‚ customer group‚ marketing‚ branding‚ enhanced employee relations and Tax incentives.
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Corporate Governance in India: Disciplining the Dominant Shareholder Abstract The nascent debate on corporate governance in India has tended to draw heavily on the large Anglo-American literature on the subject. This paper argues however that the corporate governance problems in India are very different. The governance issue in the US or the UK is essentially that of disciplining the management who have ceased to be effectively accountable to the owners. The problem in the Indian corporate sector
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name. CORPORATE PERSONNEL When an individual purchases a share of stock in a corporation‚ that person becomes a shareholder and owner of the corporation. Shareholder and corporations are liable. THE LIMITED LIABILITY OF SHAREHOLDER One of the key advantages of the corporate forms is the limited liability of its owners. Corporate shareholders normally are not personally liable for the obligations of the corporation beyond the extent of their investments. CORPORATE TAXATION Corporate profits
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Chapter 158 Distributions to Shareholders: Dividends and Repurchases ANSWERS TO END-OF-CHAPTER QUESTIONS 158-1 a. The optimal distribution policy is one that strikes a balance between dividend yield and capital gains so that the firm’s stock price is maximized. b. The dividend irrelevance theory holds that dividend policy has no effect on either the price of a firm’s stock or its cost of capital. The principal proponents of this view are Merton Miller and Franco Modigliani (MM). They
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The purpose of the corporation: Shareholder-value maximization? Finance Working Paper N°. 95/2005 Revised version: February 2006 Petra Joerg Institut für Finanzmanagement‚ Universität Bern Claudio Loderer Institut für Finanzmanagement‚ Universität Bern Lukas Roth The Pennsylvania State University Urs Waelchli Institut für Finanzmanagement‚ Universität Bern © Petra Joerg‚ Claudio Loderer‚ Lukas Roth and Urs Waelchli 2006. All rights reserved. Short sections of text‚ not to
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contribute $50‚000 cash to Lima for 50 shares of its stock. Matthew will contribute land having a $35‚000 adjusted basis and a $50‚000 FMV for 50 shares of Lima Stock. Lima will borrow additional capital from a bank and then will subdivide and sell the land. Prepare a memorandum‚ compare tax and financial accounting for this transaction.” Memorandum To: Dr. Ulysses Taylor From: Jessica Cain Date: January 26‚ 2015 Subject: Tax treatment of corporate formation for Lisa and Matthew Lisa and Matthew
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large jury verdict on behalf of his client in a personal injury case. His wife Jane Smith accompanies him during your meeting because she has some additional tax planning advice to ask of you. ROLE: After reviewing John and Jane Smith’s points of view‚ it will be your turn as a tax professional to decide on the best course of action from a tax perspective on their issues. Prepare a three page memo (at least 900-1‚500 words per page) to John and Jane Smith addressing the issues presented. PLAYERS:
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INTRODUCTION A Shareholders’ Agreement is an agreement amongst the shareholders of a company. When a company is created‚ its founding shareholders determine how a company will be owned and managed. The Shareholders’ Agreement establishes rules to govern the relationship between two or more owners of a company. Without a shareholders’ agreement in place‚ the rules that apply are in the applicable corporate statute. The shareholders’ agreement creates an overlay that addresses issues created or left
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