...business). This system applies to the business S-corporation-called the "C-corporation" (C-corp) for reasons we'll see shortly-and the system of taxing first the corporation and then its owners is called the "corporate double tax." "Pass through" taxation. The entity (called a "flow-through" entity) is not taxed but its owners are each taxed (more or less) on their proportionate shares of the entity's income. The leading forms of pass through entity (further explained below) are: Partnerships, of various types. "S-corporations" (S-corps), as distinguished from C-corps. Limited liability companies (LLCs). A sole proprietorship such as John Doe Plumbing or Marcus Welby, M.D. is also considered a pass through entity even though no "organization" may be involved. The first major consideration (in this case, a tax consideration) in choosing the form of doing business is whether to choose an entity (such as a C-corp) that has two levels of tax on income or a pass through entity that has only one level (directly on the owners). Losses are directly deductible by pass through owners while C-corp losses are deducted only against profits (past or future) and don't pass through to owners. The major business consideration (as opposed to tax consideration) in choosing the form of business is limitation of liability, that is, to protect your assets from the claims of business creditors. State law grants limitation of liability to corporations (C and S-corps), LLCs, and partners in certain forms of...
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...Bill and Darlene plan to go into business together. They anticipate losses in the first two or three years, which they would like to use to offset income from other sources. They also are concerned about exposing their personal assets to business liabilities. Write a short paper advising Bill and Darlene what business form you would recommend for them as they start up their business. State any assumptions you make. There are many different options for Bill and Darlene as they decide to start their business together. They also have to make some important decisions as to the type of business structure they should form. It will have an impact on how much Bill and Darlene will have to pay for taxes, the amount of paperwork necessary and the personal liability they face. The decision depends on the individual circumstances of the business owners. There are 3 primary factors that should be considered when choosing a business entity: liability, taxation and record-keeping (Entrepreneur.com). Liability Bill and Darlene need to determine to what extent they need to be insulated from legal liability. This can depend on the kind of business they’re planning to start. A business that has a large amount of fixed assets that require hefty investments may mean the potential first year losses will be higher than expected so it would be better to limit their personal liability for the business losses. A Limited Liability Partnership (LLP), a Limited Liability Company (LLC), or a corporation...
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...Limited Liability Company (LLC) vs. Sub-Chapter S Corporation (S Corp) What is the difference between an LLC and an S Corp? When choosing to incorporate, the most common decision smaller businesses face is which type of corporation to form. Here is a comparison between LLCs and S-Corporations. LLC formation came into its own at the end of 1996 when the “check-the-box” taxation regulations were passed and LLCs were allowed to enjoy, among other things limited liability, flexibility of management, and the option to elect pass-through taxation. A limited liability company is a hybrid type of legal structure that provides the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership. The "owners" of an LLC are referred to as "members." Depending on the state, the members can consist of a single individual (one owner), two or more individuals, corporations or other LLCs. Unlike shareholders in a corporation, LLCs are not taxed as a separate business entity. LLC members report profits and losses on their personal federal tax returns, just like the owners of a partnership would. When forming an LLC there are some general principles one must adhere to per State. First when choosing a name for your LLC you need to follow three rules. One it must be different from an existing LLC in your state. Two it must indicate that it's an LLC (such as "LLC" or Limited Company"). And three it must not include words restricted by your state...
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...AMERICA Morgan Stanley & Co. LLC Adam S. Parker, Ph.D Adam.Parker@morganstanley.com +1 212 761 1755 Brian T. Hayes, Ph.D Brian.T.Hayes@morganstanley.com Antonio Ortega Antonio.Ortega@morganstanley.com November 26, 2012 Adam J. Gould, CFA Adam.Gould@morganstanley.com US Equity Strategy The 2013 Playbook We are launching our 2013 US equity outlook today. We have been cautious on US equities for much of the last two years. Our concerns around US deficit / debt and the obvious borrowing from the future that occurs from unconventional policy, the European sovereign crisis, and slower growth in emerging markets generally remain, but the acuteness of these issues appears for now to be less sharp. Our 2013 year-end target calls for low-to-mid single digit upside (Exhibit 1) predicated on our view that 2014 corporate earnings are likely to modestly recover from our 2013 forecasted level, perhaps with profits troughing during the April 2013 earnings season. Our year-end 2013 S&P500 price target is 1434, and our bull and bear targets are 1733 and 1135 (Exhibit 1). Our EPS outlook for 2014 is $110.21, up from our 2013 forecast of $98.71, both well below consensus. Improving Michigan Confidence and tightening corporate spreads drive the relative improvement in our earnings outlook. Please see our Interactive Model: S&P500: 2013 Year-End Forecast, also published today, to play with key assumptions and change assumptions for EPS, S&P price-to-earnings multiples and the year-end...
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...available 24/7 to assist you what you need, Click Here to submit your Order. ======================================================================================= Acquisition of Consolidated Rail Corp. by Benjamin C. Esty Airbus A3XX: Developing the World’s Largest Commercial Jet by Benjamin C. Esty American Chemical Corp.by William E. Fruhan, John P. Goldsberry American Home Products Corp.by David W. Mullins AQR’s Momentum Funds by Daniel B. Bergstresser, Lauren H. Cohen, Randolph B. Cohen, Christopher Malloy Arundel Partners: The Sequel Project by Timothy A. Luehrman AXA MONY by Andre F. Perold, Lucy White Beta Management Co. by Michael E. Edleson Butler Lumber Co. by Thomas R. Piper Cartwright Lumber Co.by Thomas R. Piper Citigroup 2007: Financial Reporting and Regulatory Capital by Edward J. Riedl, Suraj Srinivasan Clarkson Lumber Co. by Thomas R. Piper Cooper Industries, Inc. by Thomas R. Piper Cost of Capital at Ameritrade by Erik Stafford, Mark L. Mitchell Debt Policy at UST, Inc. by Mark L. Mitchell Dell’s Working Capital by Richard S. Ruback DermaCare: Zapping Zits Directly by Richard G. Hamermesh, Lauren Barley Diageo plc by George Chacko, Peter Tufano Dimensional Fund Advisers–2002 by Lauren H. Cohen Dividend Policy at FPL Group, Inc.by Benjamin C. Esty Dividend Policy at Linear Technology by Malcolm P. Baker, Alison Berkley Wagonfeld Equity International: The Second Act by Nicolas P. Retsinas, Ben...
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...Modes of extinguishment of obligations classified. Castan classifies the modes of extinguishing obligations in the following manner: (1) Voluntary: (a) Performance: 1) Payment; and 2) Consignation. (b) Substitution: 1) Dacion en pago (conveyance for payment); and 2) Novation. (c) By release agreement: 1) Agreement subsequent to the constitution of the obligation: a) Mutual waiver; b) Unilateral waiver; and c) Remission. 2) Agreement simultaneous to the constitution of the obligation: a) Resolutory condition; and b) Extinctive period. (2) Involuntary: (a) By reason of the subject: 1) Confusion; and 2) Death of the contracting parties in the cases where the obligations are personal. (b) By reason of the object: 1) Loss of the thing due or impossibility of performance; and (c) By failure to exercise (right of action): 1) Extinctive prescription. (see G. Florendo, The Law of Obligations and Contracts [1936], pp. 333-334, citing 2 Castan, Derecho Civil Español, 46-47.) SECTION 1. — Payment or Performance ART. 1232. Payment means not only the delivery of money but also the performance, in any other manner, of an obligation. (n) Meaning of payment. In ordinary parlance, payment refers only to the delivery of money. As a mode of extinguishing an obligation, it has a much wider meaning. Payment may consist of not only in the delivery of money but also the giving of a...
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...EVALUATION OF MUTUAL FUND PERFORMANCE TUGAS IV MAY 1, 2016 KIKI NINDYA ASIH AND NICKO ALBART DMB 10 ABSTRACT This article attempts to measure performance of three stock-based mutual funds in Indonesia over the period of January 1, 2015 – July 30, 2015 using daily data. Each of the stock-based mutual fund was picked randomly from foreign, SOE, and local investment houses. The performance evaluation employs different methods namely Sharpe, Treynor, and Jensen indices. Analysis revealed that different methods yield different result. In order to enrich evaluation, Modigliani-risk adjusted performance metric and qualitative approach were included in the analysis. By using the mix criteria, it was found that the best investment is Schoder 90 Plus Equity Fund followed by Manulife Dana Saham and Mandiri Investa Dynamic Equity. This findings show that even though stock market performed negatively over the period, stock-based mutual fund may yield slightly better than the market. Key Words: Mutual Fund, Sharpe Index, Treynor Index, Jansen Index, M2. I. INTRODUCTION This paper aims at measuring portfolio performance of stock-based mutual funds from three different investment manager over the period of January 1, 2015 – July 30, 2015. Three randomly mutual fund was chosen, namely Schoder 90 Plus Equity Fund (Schroder Investment Management Indonesia), Mandiri Investa Dynamic Equity (Mandiri Manajemen Investasi), and Manulife Dana Saham (Manulife Aset Manajemen...
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...Integrated Company Analysis Group A12 John Faustgen Murali Maddipatla Spencer Morse Topher Stephensen Hanjin Yu Table of Contents Company Introduction......................................................................................................................................... 1 Executive Summary .............................................................................................................................................. 1 Current Issues ......................................................................................................................................................... 1 Marketing Analysis ............................................................................................................................................... 2 The Target Segment .................................................................................................................................. 2 The Positioning Strategy ........................................................................................................................... 3 The Product Strategy................................................................................................................................. 3 The Promotion Strategy ............................................................................................................................ 4 The Distribution Strategy .............................................................................
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...MERGERS & ACQUISITIONS INTRODUCTION Why merge? Why sell? A division of a company might no longer fit into larger corp’s plans, so corp sells division Infighting between owners of corp. Sell and split proceeds Incompetent management or ownership Need money Business is declining (e.g. a buggywhip company) Industry-specific conditions Economies of scale BASIC DEFINITIONS: MERGER: Owners of separate, roughly equal sized firms pool their interests in a single firm. Surviving firm takes on the assets and liabilities of the selling firm. PURCHASE: Purchasing firm pays for all the assets or all the stock of the selling firm. Distinction between a purchase and a merger depends on the final position of the shareholders of the constituent firms. TAKEOVER: A stock purchase offer in which the acquiring firm buys a controlling block of stock in the target. This enables purchasers to elect the board of directors. Both hostile and friendly takeovers exist. FREEZE-OUTS (also SQUEEZE-OUTS or CASH-OUTS): Transactions that eliminate minority SH interests. HORIZONTAL MERGERS: Mergers between competitors. This may create monopolies. Government responds by enacting Sherman Act and Clayton Act VERTICAL MERGERS: Mergers between companies which operate at different phases of production (e.g. GM merger with Fisher Auto Body.) Vertical mergers prevents a company from being held up by a supplier or consumer of goods. LEVERAGED BUYOUTS (LBOs): A private...
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...individuals and/or professionals subject to? o Estate tax, gift tax, self-employment tax, social security, medicare, unemployment taxes, excise, sales & use, property • How do tax laws affect decisions made by individuals? Businesses? o May determine how much an individual decides to gift or donate, how and where they choose to invest their money, whether they set up a trust or estate, do or do not purchase particular goods (eg might avoid cigarettes because of the excise tax, but may buy an electric vehicle for the tax benefits). May also be a factor in determining where they move or whether they take a job in a city/state with greater taxes. For businesses, it can help determine how they choose to structure (sole proprietor vs partnership vs LLC vs S Corp vs C Corp), whether they choose to pursue a particular product line (for example, if the government is offering a tax relief program for a particular product such as a crop or energy efficient technology), and where they decide to hire their workers. • What are the ethical guidelines that will apply to individuals in tax practice? o Don’t take chances in the hope that the return will not be audited. Every action taken should be justifiable. Inform clients of risks involved in the position that is taken if it is not successful. Allowed to use client estimates if they are reasonable. Inform client if receipts or other docs are required. Make every effort to answer a question on a form. If error is found, advise client to fix it,...
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...C:11-58 a. E&P, January 1 $155,000 Current year taxable income before distribution $40,000 Capital gain on distribution of land* 30,000 Minus: Federal income taxes [$7,500 + (0.25 x $20,000)] (12,500) 57,500 E&P before distribution $212,500 Minus: Cash distribution (100,000) Property distribution (100,000) E&P, December 31 $ 12,500 *E&P and tax gains are the same. Both distributions are fully taxable as dividends to Jeff and John in the amount of $100,000 each. John takes a $100,000 FMV basis in the land he receives. b. AAA, January 1 $125,000 Current year ordinary income $40,000 Capital gain on distribution of land 30,000 70,000 AAA before distribution $195,000 Minus: Cash distribution ( 97,500) Noncash distribution ( 97,500) AAA, December 31 $ -0- AE&P, January 1 $ 30,000 Minus: Remainder of cash and property distributions ( 5,000) AE&P, December 31 $ 25,000 Of each distribution, $97,500 is nontaxable assuming the shareholder has sufficient basis in his stock. The remaining $2,500 of each distribution is a dividend included in the shareholder’s gross income. John takes a $100,000 FMV basis in the land he receives. ...
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...ABSTARCT: This report aims to give a brief understanding of strategic commitments, the rationality of predatory pricing and the extent to which predatory pricing strategies are used in the global airline industry. DATE: 5th March 2015 Introduction This report aims to give a brief understanding of strategic commitments and the rationality and extent to which predatory pricing strategies are used in the global airline industry. The Airline industry, being highly competitive, offers many examples of both Strategic Commitment making and Predatory Pricing strategies. What are Strategic Commitments... The commitments that firms make are two pronged, having direct and strategic effects. The direct effect is the clearly identifiable aspect of the commitment. The strategic effect of the commitment is more subtle, as it is the influence and response which the commitment generates from the competitors in the market in regards to their intended short/medium term tactical plans. Strategic commitments can be described as a form of strategy that firms have at their disposal, in which information on plans or intended actions by the business are publically released with the purpose of influencing the actions of other key market players. To be considered a strategic commitment the announced plan/action must have visibility so that those it is intended to influence can observe it, and it must be difficult to reverse, due to costs or other factors such as potential damage to a firm’s...
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...McDonald’s Value Chain Analysis Jeovani Zamarripa, Alicia Wylie, y Jason Flores, Conor Mullarkey Mission Statement “McDonald's brand mission is to "be McDonald s be our customers' favorite place and way p to eat." Our worldwide operations have been aligned around a global strategy called the Plan to Win centering on the five basics of an t i th fi b i f exceptional customer experience – People, Products Place, People Products, Place Price and Promotion. We are committed to improving our operations and enhancing our customers' experience.” Company History McDonald s McDonald’s Bar-B-Que (1940) • World’s 1st McDonald’s • Founded by Dick and Mac McDonald • San Bernadino, CA • D i i & car hop service Drive-in h i McDonald’s (1948) •N Name F Formulates l • Menu develops • 15 Cent hamburger Company Info • Corporate Headquarters: p q – McDonald’s Corporation 2111 McDonald's Dr Oak Brook, IL 60523 • Employees: – Approximately 400,000 McDonald s employees globally McDonald’s – 1.6 million people globally are employed through McDonald’s restaurants and their franchises • Restaurants: – 32,000 world-wide, 118 countries 2009 Revenue & U.S. Stocks k (US only) • NYSE: MCD – Current Price: $64.74 – Change: $0.26 + g (As of 2/16/2010) • • • • 2009 Revenue (mil.)$22,744.701 Year Revenue Growth -3.3% 3 3% 2009 Net Income (mil.)$4,551.001 Year Net Income Growth 5.5% Y N tI G th 5 5% Leadership James Skinner Vice Chairman, CEO Left to Right: Jose...
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...Introduction S corporations are required to annually file Form 1120S, U.S. Income Tax Return for an S Corporation, although they generally are not subject to federal income taxes. Instead, an S corporation passes its profits and net losses to the shareholders, who are required to report the items on their individual income tax returns. This distribution of the flow-through income, deductions, and other items are reported to the shareholder and the Internal Revenue Service on Form 1120S Schedule K-1, Shareholder’s Share of Income, Deductions, Credits, etc. S corporation is one of the fastest growing types of business entities and the most common type of corporate entity filing returns with the IRS. It also offers several attractive benefits to its shareholders. As pass-through tax entities means that profits are subject to tax at only one level. Organizing a business as an S corporation allows shareholders to avoid double taxation on business profits with limited liability protection. In addition, S corporations have the legal capacity to flow through business losses, within limitations, to their shareholders which can be used to offset their taxable income from other sources, such as salaries and wages. FICA tax is imposed only with respect to employee wages and not on distributive share of shareholders. If shareholder-employees are not paid a “reasonable” wage for the services they perform for the S corporation, the IRS may re-categorize distributions paid for wages...
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...|(2.7) Net operating profit after taxes (NOPAT) C K |Answer: c |MEDIUM | |EP Enterprises has the following income statement. How much net operating profit after taxes (NOPAT) does the firm have? | | | | | | | | | | |Sales | | | |$1,800.00 | | | | |Costs | | | |1,400.00 | | | | |Depreciation | | | 250.00 | | | | |EBIT | | | |$ 150.00 | | | | |Interest expense | | | 70.00 | | | | |EBT | | | |$ 80.00 | | | | |Taxes (40%) | | | 32.00 | | | | |Net income | | |$ 48.00 ...
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