Some may argue that a high tax rate on dividends creates incentives for managers to go about

Question:

Some may argue that a high tax rate on dividends creates incentives for managers to go about their business without credibly convincing investors that the firm is doing well, even when it is. Discuss how this may be true.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Fundamentals of corporate finance

ISBN: 978-0470876442

2nd Edition

Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates

See More Books

Question Posted: Jun 12, 2012 01:18 AM

See More Questions

Incentives for managers to record sales early include a. An effective code of conduct. b. Being held responsible for financial performance. c. Compensation based on sales performance. d. Both b. and...
Some may argue that a companys financial bottom line is all important. Comment on this from the financial perspective of the BSC approach.
Should the Reduced Tax Rate on Dividends Affect an MNCs Capital Structure? Point No. The change in the tax law reduces the taxes that investors pay on dividends. It does not change the taxes paid by...
Kyrsten Haas expects an S corporation investment to generate a profit of $200,000. Her share of the S corporation is 15%. What is Kyrstens income tax if no cash is distributed? Kyrsten's marginal tax...
Teal, Inc., owns two warehouses that were placed in service before 1987. This year, accelerated depreciation on Warehouse A is $36,000 (straight-line depreciation would have been $30,000). On...
A plant is proposing to install a combined heat and power system to supply electrical power and process steam. Power is currently taken from a utility company, and steam is generated using onsite...
Given the following results from a $2^{3}$ factorial experiment, Interpret the effects based on the confidence intervals. Factor A Factor B Factor C Rep. I Rep. 2 -1 13.8 14.6 10.8 8.4 1 9.0 9.8 1...
At December 31, balances in Manufacturing Overhead are: Shimeca Companydebit $1,200, Garcia Companycredit $900. Prepare the adjusting entry for each company at December 31, assuming the adjustment is...
Vulcan Company's contribution format Income statement for June is as follows: Vulcan Company Income Statement For the Month Ended June 30 Sales Variable expenses Contribution margin Fixed expenses...
A new police car costs the Bay City Police Department $26,000. The annual maintenance cost for a car depends on the age of the car at the beginning of the year. (All cars accumulate approximately the...
You have just read a press release in which a firm claims that it will be able to generate a higher level of cash flows for its investors going forward. Justify the choice of a dividend payout that...
Fled Flightstone Minings management does not like to pay cash dividends due to the volatility of the companys cash flows. Fled management has found, however, that when it does not pay dividends, its...
Compute the following items for the statement of cash flows: 1. The beginning and ending Retained Earnings balances are $29,000 and $80,000, respectively. Net income for the period is $62,000. How...
While interviewing applicants, questions are often asked by recruiters about qualifications. Your Task. Revise the above sentence to avoid dangling and misplaced modifiers.
How long should paragraphs be?
Tracking devices are being installed by many companies to gather real-time information on how employees interact. Your Task. Business writing is more forceful when it uses active-voice verbs. Revise...
When is the indirect strategy appropriate, and what are the benefits of using it?
Valuable insider information about a companys culture, interview procedures, and day-to-day activities is available for those who take the time to search. Enterprising job seekers check YouTube...
Manufactures now account for a majority of exports from the developing world. What factors have limited the benefits that developing countries receive from this progress?
1A. If the researcher is concerned about the number of variables, the nature of the analysis, and completion rates, then, he/she is at which stage of the sampling design process (Figure 11.1 in the...
The terminals of a generator producing a voltage V are connected through a wire of resistance R and a coil of inductance L (and negligible resistance). A capacitor of capacitance C is connected in...
An American firm is evaluating an investment in Mexico. The project costs 500 million pesos, and it is expected to produce an income of 250 million pesos a year in real terms for each of the next 3...
The current exchange rate is USD2 = GBP1. Cookham Industries is a large British firm that exports computer games to the United States. If the dollar depreciates relative to the pound, Cookham will...
The following table shows the local prices of a Grande Latte coffee in Starbucks in 2009: a. Calculate the dollar price of a latte in each city. Does purchasing power parity hold? b. What would the...
Describe, in steps, at least one strategy used to attack embedded operating systems. Describe, in steps, at least one strategy used to defend against the chosen attack.
how does a hypercompetetice environment challenge those in an industry
Describe how managers can reduce unnecessary costs, including real - world examples of how it has been done

Some may argue that a high tax rate on dividends creates incentives for managers to go about

Question:

Step by Step Answer:

A credible signal is usually interpreted as a signal that is co...View the full answer

Fundamentals of corporate finance

Students also viewed these Corporate Finance questions