Question: Question 5 (this question has two parts a) and b)) (2+3+3 = 8 marks) Part a) When an investor's marginal tax rate is greater than

Question 5 (this question has two parts a) and b)) (2+3+3 = 8 marks) Part a) When an investor's marginal tax rate is greater than corporate tax rate, then which of the two options will apply for him/her: Option A: Pay some tax on the dividend Option B: have excess tax credits. Explain your answer. Part b The following table shows firms from different industries in the Australian stock market. Company Name Industry Life-cycle stage Earnings Growth Dividend Water Ltd Utility Mature Stable Pays constant Dividend Energy Ltd Utility Mature Stable Does not pay dividend Gas Ltd Utility Mature Stable Repurchases share Tech Ltd Technology Growth Unstable Does not pay dividend  Given the above information, which firm(s) do you expect to pay dividends and why? Explain your answer.  According to you, which firm(s) could have agency conflicts between managers and shareholders? Explain your answer. How can the manager of the firm reduce this agency conflicts?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Mills Corporation acquired as a long-term investment $240 million of 6% bonds, dated July 1, on July 1, 2021. Company management has the positive intent and ability to hold the bonds until maturity....

i am taking Cooperate finance which is FIN222 can help me to answer.. ? Tutorial 1 Topic 1 Chapter 1 4. What are the main advantages and disadvantages of organising a firm as a corporation? 6. You...

Need help with these discussion postings (in a document) and assignments (all in separate files), all directions are included as well. FINANCE DIRECTIONS Need to provide 1 original post substantial...

Need help with the attached questions from finance major Assignment 3 Questions 1. Anle Corporation has a current price of $27, is expected to pay a dividend of $2 in one year, and its expected price...

Question 4 (this question has two parts, a) and b)) (5+3 = 8 marks) Parta) Answer: From the figures mentioned below of Umbrella Corp, calculate the weighted Average Cost of Capital (WACC). Interest...

Question 5 (this question has two parts, a) and b)) (20 marks) Part a. The total market value of Biz Tech shares is $60 million, and the total market value of its debt is $40 million. The treasurer...

Question 5 this question has two parts, (a) and (b) Part (a) {8 marks) Manufacturing Ltd. wants to determine their WACC. Their 9% semi-annual bonds (par value $1,000) are selling for $1,154.05 with 8...

Question 5 (this question has two parts, a) and b) ) (20 marks) Part a. The total market value of Biz Tech shares is $60 million, and the total market value of its debt is $40 million. The treasurer...

can you help with questions 41-80? I have attached the document again for reference. 1. The form of organization for a business is not an important issue, as this decision has very little effect on...

I need drastic help. I have attached a document that is to help me in my finance class. Are you able to help me work through this set of questions? 1. The form of organization for a business is not...

An analyst gathered the following information regarding Moon Traders: Current market share price = $55 Riskfree rate = 6% Current market risk premium = 7% Beta of stock = 1.4 Target debttoequity...

A hybrid automobile has two motors, gasoline and electric. It switches between motors for power, sometimes using both motors. When accelerating, both electricity and gasoline are providing power to...

Presented below are long-term liability items for Lind Company at December 31, 2015. Prepare the long-term liabilities section of the balance sheet for Lind Company. Bonds payable, due 2017 .....

12.58 Solve Prob. 12.10 using PSpice or MultiSim .

Finding Financial Information Refer to the financial statements of Urban Outfitters in Appendix C at the end of the book. Required: 1. What is the companys revenue recognition policy? 2. Assuming...

During 20X1, the Downtown Department Store had credit sales of $900,000. The store manager expects that 2% of the credit sales will never be collected, although no accounts are written off until 10...

Laser light of wavelength 500.0 nm illuminates two identical slits, producing an interference pattern on a screen 90.0cm from the slits. The bright bands are 1.00 cm apart, and the third bright bands...

Assume that at the beginning of 2015 Quick Air purchased a used Jumbo 747 aircraft at a cost of $56,700,000. QuickAir expects the plane to remain useful for five years (5,000,000 miles) and to have a...

Sweet Tooth Candy Company budgeted the following costs for anticipated production for August 2014: Prepare a factory overhead cost budget, separating variable and fixed costs. Assume that factory...

Determine if the overhead allocated to the product relates to a single plantwide overhead rate method, multiple production department factory overhead rate method, or activity-based costing...

Using the information in Table 3.10 to determine the (a) sampling proportions for a stratified random sample selected using proportional allocation. (b) sample size that will produce a bound on the...

Suppose that the target population has???? = 12, 000 units distributed over three strata. If the number of units in the three strata are ????1 = 4000, ????2 = 5000, and ????3 = 3000, determine the...

What is the difference between (a) ???? and ????? (b) ???? and ????? (c) IQR andIQR? (d) ???????? and ????????? (e) ???? and ????? (f) ???? and ????? (g) ???? and ???? (h) ????2 and ????2?