Complete Solutions Manual for Corporate Finance 6e 6th Edition by Jonathan Berk, Peter DeMarzo. ISBN-13: 5026
Excel Solution files are included.
PART 1: INTRODUCTION
The Corporation and Financial Markets
Introduction to Financial Statement Analysis
Financial Decision Making and the Law of ...
Thanks for your valuable feedback. Do not forget to visit us again for more documents you need. If you need any other document, let us know so we can help you further. We are available 24/7.
Door: zitongxia • 2 maanden geleden
Door: StepsSol • 2 maanden geleden
Thanks for your valuable feedback. Do not forget to visit us again for more documents you need. If you need any other document, let us know so we can help you further. We are available 24/7.
Door: christofferseim • 2 maanden geleden
Door: marcdandeneau • 5 maanden geleden
Door: eunicedujambi • 7 maanden geleden
Door: sjongede • 8 maanden geleden
Door: 1286228399R • 10 maanden geleden
Door: StepsSol • 9 maanden geleden
Thanks for your honest review. Good luck. Keep visiting us for more educational stuff.
Verkoper
Volgen
StepsSol
Ontvangen beoordelingen
Voorbeeld van de inhoud
Chapter 1
The Corporation
1-1. What is the most important difference between a corporation and all other organizational
forms?
A corporation is a legal entity separate from its owners.
1-2. What does the phrase limited liability mean in a corporate context?
Owners’ liability is limited to the amount they invested in the firm. Stockholders are not responsible
for any encumbrances of the firm; in particular, they cannot be required to pay back any debts incurred
by the firm.
1-3. Which organizational forms give their owners limited liability?
Corporations and limited liability companies give owners limited liability. Limited partnerships
provide limited liability for the limited partners, but not for the general partners.
1-4. What are the main advantages and disadvantages of organizing a firm as a corporation?
Advantages: Limited liability, liquidity, infinite life
Disadvantages: Double taxation, separation of ownership and control
1-5. Explain the difference between an S corporation and a C corporation.
C corporations must pay corporate income taxes; S corporations do not pay corporate taxes, but must
pass through the income to shareholders to whom it is taxable. S corporations are also limited to 100
shareholders and cannot have corporate or foreign stockholders.
1-6. You are a shareholder in a C corporation. The corporation earns $2 per share before taxes. Once
it has paid taxes it will distribute the rest of its earnings to you as a dividend. The corporate tax
rate is 40% and the personal tax rate on (both dividend and non-dividend) income is 30%. How
much is left for you after all taxes are paid?
First, the corporation pays the taxes. After taxes, $2 ´ (1 - 0.4) = $1.20 is left to pay dividends. Once
the dividend is paid, personal tax must be paid, which leaves $1.20 ´ (1 - 0.3) = $0.84 . So, after all the
taxes are paid, you are left with 84¢.
1-7. Repeat Problem 6 assuming the corporation is an S corporation.
An S corporation does not pay corporate income tax. So it distributes $2 to its stockholders. These
stockholders must then pay personal income tax on the distribution. So they are left with
$2 ´ (1 - 0.3) = $1.40 .
1
Voordelen van het kopen van samenvattingen bij Stuvia op een rij:
Verzekerd van kwaliteit door reviews
Stuvia-klanten hebben meer dan 700.000 samenvattingen beoordeeld. Zo weet je zeker dat je de beste documenten koopt!
Snel en makkelijk kopen
Je betaalt supersnel en eenmalig met iDeal, creditcard of Stuvia-tegoed voor de samenvatting. Zonder lidmaatschap.
Focus op de essentie
Samenvattingen worden geschreven voor en door anderen. Daarom zijn de samenvattingen altijd betrouwbaar en actueel. Zo kom je snel tot de kern!
Veelgestelde vragen
Wat krijg ik als ik dit document koop?
Je krijgt een PDF, die direct beschikbaar is na je aankoop. Het gekochte document is altijd, overal en oneindig toegankelijk via je profiel.
Tevredenheidsgarantie: hoe werkt dat?
Onze tevredenheidsgarantie zorgt ervoor dat je altijd een studiedocument vindt dat goed bij je past. Je vult een formulier in en onze klantenservice regelt de rest.
Van wie koop ik deze samenvatting?
Stuvia is een marktplaats, je koop dit document dus niet van ons, maar van verkoper StepsSol. Stuvia faciliteert de betaling aan de verkoper.
Zit ik meteen vast aan een abonnement?
Nee, je koopt alleen deze samenvatting voor €28,99. Je zit daarna nergens aan vast.