Question

Please Answer part B (Average tax rate?). and part C. Please do not copy, otherwise i...

Please Answer part B (Average tax rate?). and part C.

Please do not copy, otherwise i have to report.

New Hope Managed Care Inc. is a for-profit managed care company that serves the southwest United States. Last year, it reported $1,200,000 in income from operations, $250,000 in interest income from bonds it bought in the previous year, and $60,000 in dividend income from shares in a large drug company. New Hope also has $200,000 in surplus funds that it is considering investing in bonds that pay interest of $10,000 per year or stock that pays dividends of $9,000 per year.

a. What is New Hope's tax liability?

b. What is New Hope's marginal tax rate? Average tax rate?

c. Should New Hope invest its surplus funds in bonds or stock?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1


0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
PLEASE ANSWER QUESTION A PART 1 and 2 QUESTION B Part 1 and 2 and QUESTION...
PLEASE ANSWER QUESTION A PART 1 and 2 QUESTION B Part 1 and 2 and QUESTION C Part 1 Pleae complete it on excel or copy paste it from excel A. ClassCo sells Convertible Bond with warrant to convert into stock Bond with face $1,000 Face Rate 8.00% Term 3 Yrs. Market rate @ sale 8.50% issued: 6/30/2018 maturity 6/30/2021 Interest paid annually Bond sold for               996.00 Part 1) determine value received from sale, Discount or Premium? Part 2)...
Question 1 The average tax rate is Question 6 options: the tax rate that is paid...
Question 1 The average tax rate is Question 6 options: the tax rate that is paid on the last dollar of income earned always higher than the marginal tax rate calculated by dividing the total taxes paid by the taxable income none of the above Question 2 If Cleveland Motors Had an EBIT of $22,560,700, Interest of $7,479,900 and is taxed at an average rate of 32% what is their Net Income? Round to the nearest cent. Your Answer: Question...
Can I have answer for part 6 please? 4. The McGonigall Company has just recently paid...
Can I have answer for part 6 please? 4. The McGonigall Company has just recently paid a dividend of $2.50 per share. Their dividends have been growing at a rate of 5% over the last several decades, and will most likely continue at that rate for the foreseeable future. Their stock is currently selling for $40.00 per share. If McGonigall were to issue new stock, they would incur flotation costs of 8%. What are the costs of internal equity and...
The Wendt Corporation reported $30 million of taxable income. Its federal tax rate was 21% (ignore...
The Wendt Corporation reported $30 million of taxable income. Its federal tax rate was 21% (ignore any possible state corporate taxes). What is the company's federal income tax bill for the year? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000. Round your answer to the nearest dollar. $   Assume the firm receives an additional $3 million of interest income from some bonds it owns. What is the additional tax on this...
The Wendt Corporation reported $60 million of taxable income. Its federal tax rate was 21% (ignore...
The Wendt Corporation reported $60 million of taxable income. Its federal tax rate was 21% (ignore any possible state corporate taxes). What is the company's federal income tax bill for the year? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000. Round your answer to the nearest dollar. $   Assume the firm receives an additional $3 million of interest income from some bonds it owns. What is the additional tax on this...
Better Home, Inc. has net income (30% tax rate) of $1,800,000 for an average number of...
Better Home, Inc. has net income (30% tax rate) of $1,800,000 for an average number of shares outstanding during the year of 500,000 shares. The corporation issued $ 2,000,000 par value of 10-year, 9% convertible bonds on January 1, 2016 at a $180,000 discount. The convertible bonds are convertible into 70,000 shares of common stock . Compute the earnings per share data , excluding any note if required? Show works computation on Diluted Earnings per share by formula. please.
For which capital component must you make a tax adjustment when calculating a firm’s weighted average...
For which capital component must you make a tax adjustment when calculating a firm’s weighted average cost of capital (WACC)? Preferred stock Debt Equity Water and Power Company (WPC) can borrow funds at an interest rate of 10.20% for a period of eight years. Its marginal federal-plus-state tax rate is 25%. WPC’s after-tax cost of debt is (10.20% , 6.50%, 8.42%, 7.65%) (rounded to two decimal places). At the present time, Water and Power Company (WPC) has 10-year noncallable bonds...
NOTE: I HAVE 3 QUESTIONS ON HERE, I NEED ANSWER TO ALL QUESTIONS. THANKS 1)Turnbull Co....
NOTE: I HAVE 3 QUESTIONS ON HERE, I NEED ANSWER TO ALL QUESTIONS. THANKS 1)Turnbull Co. has a target capital structure of 58% debt, 6% preferred stock, and 36% common equity. It has a before-tax cost of debt of 8.2%, and its cost of preferred stock is 9.3%. If Turnbull can raise all of its equity capital from retained earnings, its cost of common equity will be 12.4%. However, if it is necessary to raise new common equity, it will...
I will be happy if you use excel and show me the calculation process. Please complete...
I will be happy if you use excel and show me the calculation process. Please complete in your own style. If u get any info missing or any sequence problem for the question then adjust it or take assumption for it. I hope all info there but still if i miss then do it in your own style. Thanks Roster Pte Ltd issued 100 million of 11-year bonds with a 9.5% coupon payable annually. This bond was issued a year...
ABC Inc. has a net income of $2,000 and falls in the 21% tax rate. The...
ABC Inc. has a net income of $2,000 and falls in the 21% tax rate. The firm made an interest payment of $400 during the year and the depreciation for the year was $500. During the year, the net fixed assets increased by $1000. Cash decreased by $100, inventories decreased by $50, receivables increased by $100, payables declined by $125, and the short term debt for the company increased by 200. The firm saw its common stock and paid in...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT