Corporate Tax Rates as of 2015 (Table 2.3 of textbook) Taxable Income Pay this amount on base
Question:
Corporate Tax Rates as of 2015 | (Table 2.3 of textbook) | ||
Taxable Income | Pay this amount on base income | Plus this percentage on anything over the base | |
$0 – $50,000 | $0 | 15% | |
$50,001 – $75,000 | $7,500 | 25% | |
$75,001 – $100,000 | $13,750 | 34% | |
$100,001 – $335,000 | $22,250 | 39% | |
$335,001 – $10,000,000 | $113,900 | 34% | |
$10,000,001 – $15,000,000 | $3,400,000 | 35% | |
$15,000,000 – $18,333,333 | $5,150,000 | 38% | |
Over $18,333,333 | $6,416,667 | 35% Greatland, Inc. had $284,000 in 2015 taxable income. Using the tax schedule from Table 2.3, what is the company's 2015 income taxes, average tax rate, and marginal tax rate, respectively? A. $110,760, 39.0%, 39.0% B. $96,560, 34.0%, 34.0% C. $94,010, 34.0%, 39.0% D. $94,010, 39.0%, 33.1% E. $94,010, 33.1%, 39.0% 15. You are considering a stock investment in one of two firms (AllDebt, Inc. and AllEquity, Inc.), both of which operate in the same industry and have identical operating income of $600,000. AllDebt, Inc. finances its $1.2 million in assets with $1.0 million in debt (on which it pays 10 percent interest annually) and $0.2 million in equity. AllEquity, Inc. finances its $1.2 million in assets with no debt and $1.2 million in equity. Both firms pay a tax rate of 30 percent on their taxable income. What are the asset funders' (the debt holders and stockholders') resulting return on assets for the two firms? A. 37.5%, and 35.0%, respectively B. 37.5%, and 37.5%, respectively C. 39.2%, and 35.0%, respectively D. 37.5%, and 50.0%, respectively E. 50.0%, and 50.0%, respectively |