TAXATION PAPERS WORKING PAPER N.33 - 2012 Serena Fatica Thomas Hemmelgarn Gaëtan Nicodème The Debt-Equity Tax Bias: consequences and solutions Taxation and customs union Taxation Papers are written by the staff of the European Commission's Directorate-General for Taxation and Customs Union, or by experts working in association with them. Taxation Papers are intended to increase awareness of the work being done by the staff and to seek comments and suggestions for further analyses
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acquisition, Verizon also grew considerably through investments in technology and infrastructure. Over a five-year period from 2003-2007, Verizon invested more than $74 billion to maintain, upgrade, and expand its technology infrastructure. Verizon’s debt securities are reported on the company’s balance sheet as either current or noncurrent assets depending on their maturity date. The
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experienced an increase in long-term debt of ten percent? Well, long-term debt consists of loans and financial obligations lasting more than one year. While a portion of long-term liabilities must be paid within the year, it would stand to reason that there is much more going on inside the company than an increase in long-term debt. Where did this increase come from? How has it benefited the company and its shareholders? Bonds are one of the most common types of long-term debt, and they are used to accomplish
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and its marginal tax rate is 30 percent. b. A preferred stock paying a 9 percent dividend on a Rs 100 par value. If a new issue is offered, flotation costs will be 5 percent of the current price of Rs 125. c. Internal common equity where the current market price of the common stock is Rs 60 The expected dividend for coming year should be Rs 6, increasing thereafter at a 8 percent annual growth rate. The corporation's tax rate is 30 percent. d. A new common stock
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flow cash) Financial statements: Balance sheet The balance sheet Equity= assets - liabilities current assets current liabilities cash ! inventories ! acc receivable ! equipment ! plant accounts payable ! ! fixed assets long-term liabilities long-term debt ! total shareholders equity stock ! retained earnings ! total assets x total liabilities + equity x Figure 2 example of a balance sheet Financial snapshot: 1 moment in time
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TYPES AND SOURCES OF CORPORATE DEBT AND BOND COVENANTS Corporate debts may be short term or long term in nature. Short - term debts are incurred by the company in relation to its supplies of raw materials categorized as accounts payables and are normally paid within the accounting cycle or within one year. In the balance sheet, they fall under the current liabilities. These are supposed to be financed through the company’s current assets. Long term debts are those acquired by the company from banks
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acquired by Freeport. This opportunity will eventually benefit Freeport in the future growth, given that PD is known as world’s leading producer of molybdenum-based chemicals and continuous-cast copper rod. In the case study of Freeport-McMoRan in financing an acquisition, several questions will be discussed including the events, which lead to the merger transaction following the analysis of operating and financial performance as well as the involvement of J.P. Morgan and Merrill Lynch prior to the
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investing activities: • a. Receipts from collections or sales of loans made by the entity and of other entities' debt instruments (other than cash equivalents and certain debt instruments that are acquired specifically for resale as discussed in paragraph 230-10-45-21) that were purchased by the entity • b. Receipts from sales of equity instruments of other entities (other than certain equity instruments carried in a trading account as described in paragraph 230-10-45-19) and from returns of investment
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Assignment #2: Business Financing and the Capital Structure Marquis C. Saddler Professor Jason Powers FIN100 December 1, 2013 Business Financing and the Capital Structure Explain the process of financial planning used to estimate asset investment requirements for a corporation. Explain the concept of working capital management. Identify and briefly describe several financial instruments that are used as marketable securities to park excess cash. A corporation having a financial plan
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MP A R Munich Personal RePEc Archive A critical analysis of Mudarabah & a new approach to equity financing in Islamic finance Shaikh, Salman Ahmed International Association of Islamic Banks 01. July 2011 Online at http://mpra.ub.uni-muenchen.de/19697/ MPRA Paper No. 19697, posted 19. September 2011 / 12:03 A Critical Analysis of Mudarabah & A New Approach to Equity Financing in Islamic Finance Journal of Islamic Banking & Finance, ISSN 1814-8042 By Salman Ahmed Shaikh Project Director
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