Income Tax Portal

Income Tax Portal

Archive for the 'What is Tax Shield?' Category

Democracy Now Headlines- Wed/ Mar. 18, 2009

Today’s Headlines * Congress to Propose Tax on AIG Bonuses * Bailout Firms Plot to Shield Bonuses from Regulation * U. S. Mulls Widening Pakistan Strikes * Obama to Appoint Darfur En. . .

23 February 2010 at 21:50 - Comments

I Believe I Am A Strong Conservative, But Am Conflicted With This. What Do You Guys Think?

I support the death penalty 100% I disagree with unions. Prison sentences should be much stronger. Im sorry, parole after 8 years for someone who kills their parents is ridiculous. Against the legalization of marijuana. That would be just the start and everything would be legalized then. No, the buck needs to stop somewhere. Against [...]

23 February 2010 at 21:49 - Comments
Hungry Hungry Hypocrite
Wow. You're actually wrong about absolutely everything. How DO you manage that?
24 February 10 at 08:10
No Humans Allowed
well I stop to read when you say ( I disagree with unions.) I think you are in the wrong country
24 February 10 at 09:00

Finance Question? Tax Shield?

What is the annual tax shield to a firm that has total assets of $80 million and a net worth of $55 million, if the average interest rate on debt is 8. 5% and the marginal tax rate is 35%?

13 February 2010 at 15:27 - Comments
Doctor Deth
what is a tax shield? - what is the company's net income before taxes? how much borrowed debt do they ...
13 February 10 at 16:02

What Has Better Tax Benefits For A Corporation? $100 To A Charity Or $100 On Business Expenses?

I know both are tax deductible but I’m wondering which has a greater tax shield. Thanks!

13 February 2010 at 15:26 - Comments
Jestep
Both of them subtract $100 from the gross revenue, making net taxable profits $100 less, so they have the same ...
13 February 10 at 17:15
SmartA$$
Probably equal. Which would benefit the corp the most? Goodwill at a local charitable function or a $200 dinner ...
13 February 10 at 17:47

Would A Company Financing With Debt Or Equity Have A Greater Tax Shield Effect?

Financing with debt provides provides interest tax shield as interest expense is tax deductible, whereas if financing is done by equity, the dividends distributed are not tax deductible.

13 February 2010 at 14:13 - Comments

What Would Be The Present Value Of The Tax Shield?

The management of Graphicopy is trying to determine how much debt they should have in their capital structure. If they sell $500,000 in perpetual bonds with a 9 percent coupon, what would be the present value of the tax shield? Assume the marginal tax rate is 35%. a. $15,750 b. $29,250 c. $175,000 d. $45,000

13 February 2010 at 14:08 - Comments
Ranto
The PV of the tax shield on a perpetual bond is equal to the tax rate times the amount of ...
13 February 10 at 14:42
Oren H
it's been awhile since i did this, but i believe the answer is c. $175, 000. the tax shield the interest ...
13 February 10 at 15:40

Why Is Debt Financing Said To Include A Tax Shield For The Company?

5. Why is debt financing said to include a tax shield for the company? a)Taxable income is reduced by the amount of the debt b)Taxable income is reduced by the amount of the interest c)Taxes are reduced by the amount of the debt d)Taxes are reduced by the amount of the interest

13 February 2010 at 13:50 - Comments
mbrcatz
People who advocate borrowing money for the "tax advantages" are bad at math. Pay $1 (in interest) to save $.28 (in ...
13 February 10 at 14:36

Floor Statemen: Media Shield, Tax Extenders, Energy

Sen. Cornyn delivers a floor statement on media shield, tax extenders and energy.

13 February 2010 at 13:49 - Comments
bunnyluv41
Nicely addressed. Anyone know what happened at around the 8:20 mark?
13 February 10 at 14:00