Question: Using the same information, what is the amount of the S Corporation premium if the cash flow for the C Corp & S Corp is

Using the same information, what is the amount of the S Corporation premium if the cash flow for the C Corp & S Corp is $250,000? Assumptions: C Corporation v. S Corporation Valuation Corporate Tax Rate = 21% Combined Individual Tax Rate =30% Qualified Business Income Deduction=20% All income is distributed, individual dividend tax rate=20% Capitalization Rate=25% Business Type: Accounting Firm Cash Flow before Taxes $600,000 $600,000 Group of answer choices 1

63,200

128,000

157,968

8,675,309

Step by Step Solution

★★★★★

3.43 Rating (143 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

The detailed answer for the above question is provided below Firstly lets understand what an S Corporation and C Corporation are 1 A C Corporation C C... View full answer

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 Accounting Questions!

The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-5. Ivan's grandfather died and left a portfolio of municipal bonds. In 2012, they pay Ivan...

The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-6. On December 12, Irene purchased the building where her store is located. She paid...

The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-4. Ivan and Irene paid the following in 2012 (all by check or can otherwise be...

Ethel produces different styles of potato chips (ruffled, flat, thick-cut, and gourmet) for different corporate customers. Each style of potato chip requires different preparation times, different...

dear tutor, i need you help to write the audit planning memo for this company (le chateau inc) ANNUAL REPORT 20 15 CORPORATE PROFILE Le Chteau is a leading Canadian specialty retailer offering...

Please answer the six questions on bottom, they are from the same situation as above. Data is stated above for refrence Company Background Middle River Automotive, LLC (MRA) is a company that was...

1. How has Adecco been able to outperform its rivals in the staffing industry? 2. What is the strategic and economic rationale for its acquisition of Olsten? List and describe at least 3 elements. 3....

Middle River Automotive, LLC (MRA) is a company that was established in 2017 with the goal of designing, developing, manufacturing, and selling both hybrid and fully electric cars and light trucks....

Protecto Corporation purchased 80 percent of Strand Company's outstanding shares on January 1, 20x1, for $44,800 more than book value. At that date, the fair value ofthe noncontrolling interest was...

Hi Ruchi, I need help with the attached assignment. It's due in about a week. Thanks 1) The paper should be written in APA style Research Paper format. This is the link that explains the research...

Allan Company signs a five-year capital lease with Vortal Company for office equipment. The annual lease payment is $13,000, and the interest rate is 8%. Required 1. Compute the present value of...

Help on these two 8. At 500.0 K, one mole of gaseous ONCI is placed in a one-liter container. At equilibrium it is 9.0% dissociated according to the equation shown here: 20NCI 2NO + Cl Determine the...

Which of the following is the first task in international financial management? Option A managing working capital and cash flow Option B managing currency risk Option C choosing a capital structure...

Q1 During the readings you had the opportunity to look at the issue of efficiency. Certainly one of the most valuable commodities any organization has is time. By being able to reduce the duration of...

Q1 In this unit, you had the opportunity to talk about the important steps that leaders take to manage project teams and to ensure that their work is commensurate with project vision and ultimate...

Made a project management plant and describe the following: Why Project Management is important for a variety of leadership roles today Action Plan for project management training for leaders at...

1. How does Dr.Meshko'sview differ from Dr.Gwandes perspective? 2. Is our society ready for the shift in the way we view aging and death? How can we start discussing permitting dignified death with...

The Pareto Prindple, or the 8020 rule, is ohen applied to supply chaim management to undersand the distribution of resources and impacts. It helps in idencibing which products, supplieri, or...

Sun Trust Banks owns a large block of Coca-Cola Company (Coke) common stock that it has held for many years. SunTrust indicates in a note to its financial statements that all equity securities held...

Define financial leverage. Explain why financial leverage works to the benefit of the common shareholders whenever the ROCE exceeds the ROA.

Exhibit 7.14 presents selected financial statement data for three chemical companies: New Market Corporation (recently formed from a merger of Ethyl Corporation and Afton Chemical Corporation),...

Refer to Figure 17-9. Explain why area D is a dead-weight loss. What about area F?

Explain how lifting an import quota on other countries will affect an exporting country that had been exempted from the quota restriction.

Imagine Mexico is considering using an import quota rather than a tariff to protect its domestic automobile industry. How does the outcome differ from that of a tariff?