Question: How does the Black Tepper stocks versus bonds puzzle pertain to pension
How does the Black Tepper stocks-versus-bonds puzzle pertain to pension planning? Is it still tax advantageous for corporations to hold bonds in their pension accounts subsequent to the 1986 Tax Act?
Answer to relevant QuestionsWhat is the meaning of the term overfunded in terms of a pension plan? What are the advantages and disadvantages to the corporation and its employees of an overfunded pension plan? Suppose a firm has a defined benefit pension plan and faces a marginal tax rate on ordinary income of 35%. The firm can earn or issue fully taxable bonds that yield 12% and can purchase stock yielding 18%. The firm faces an ...The accompanying table can be used to make paired comparisons of the desirability of salary, deferred compensation, and pensions as a function of a = current and future employer marginal tax rates, b = current and future ...Why do U.S. multinationals generally like the “check-the-box” regulations? Ithaca Snowboards Corporation is a large U.S. producer of in-style winter recreational equipment and apparel. Ithaca Snowboards currently has its primary facilities in the United States as well as distribution and marketing ...
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