Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. assume that lopine ltd, a us-based company (which

Assume that LoPine Ltd, a US-based company (which has a classical taxation system), borrows $10...

90.2K

Verified Solution

Question

Accounting

Assume that LoPine Ltd, a US-based company (which has a classical taxation system), borrows $10 million at an interest rate of 15% and uses the funds to repurchase shares worth $10 million. Further, assume that the company tax rate is 35%, the marginal income tax rate is 30% and the average tax rate on equity income is 12%. Calculate the net tax savings per year.

This question is multiple choice and the answer is 192,000 but I want to know how to get the answer

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Describe the interactions of hormones and sucrose in the regulation of axillary bud growth in stems.

Biology
Q

Using specific values for each of the pressures, explain air movement into the out of the...

Medical Sciences
Q

Community members who attended the Annual Neighborhood picnic earlier today are experiencing illness which they believe...

Basic Math
Q

Ocean World is considering purchasing a water park in Charlotte, North Carolina, for $2,100,000. The new...

Accounting
Q

Consider the following X 22 50 69 100 106 Y 213 224 176 129 102...

Statistics
Q

37 X 16 13 Round to two decimal places if necessar

Statistics
Q

If g(x) = 1 - 2x + 3x2, find the average rate of change of...

Calculus
Q

Find the domain of the following function:f(x)= 1/ (-2x + 36)Select the correct answer below:A)...

Algebra
Q

A dietitian at a hospital wants a patient to have a meal that has 106...

Algebra
Q

Find a third degree polynomial P x that has zeros at x 2 x 2...

Algebra
Q

The following balance sheet for the Hubbard...

Accounting
Q

The following was taken from the records of Smith Company in the year ending December...

Accounting