Shelf registration of a security is a procedure affixing a front
Answer(s): C
SEC Rule 415 allows corporations to file registration statements covering a stipulated amount of securities that may be issued over the 2-year effective penned of the statement The securities are placed on the shelf and issued at an opportune moment without the necessity of tiling a new registration statement, observing a 20-day waiting period, or prepping a new prospectus The issuer is required only to provide updating amendments or to refer investors to quarter and annual statements tiled with the SEC. Shelf registration is most advantageous to large corporations that frequent offer securities to the pubic.
The annual tax depreciation sense on an asset reduces income taxes by an amount equal to
A depreciation deduction will reduce a firm's tax by the amount of the deduction flumes the 1rnarginal tax rate A dollar deducted is offset against the firm's last (marginal) dollar of income
None of the following items are deductible in calculating taxable income except
Answer(s): D
Sec.162(a) states that a deduction is allowed for the ordinary and necessary expenses incurred during the year in any trade or business. A corporation may therefore deduct a reasonable amount for compensation Accrued vacation pay is a form of compensation that results in an allowable deduction for federal income tax purposes
An of the following are adjustments/preference items to corporate taxable income in calculating alternative minimum taxable income except
Taxable income is adjusted to maven at attentive minimum taxable income, Some of the common adjustments include gains or losses from long-term contracts, gains on installment sales of real property. mining exploration and development costs, charitable contributions of appreciated property, accelerated depreciation, the accumulated current earnings adjustment, and tax-exempt interest on private activity bonds issued after August 7, 1986 A sales commission accrued in the current year but paid in the following year is not an example of an AMT adjustment.
Which one of the following factors might cause a firm to increase the debt in TTS financial structure?
Answer(s): A
An increase in the corporate income tax rate might encourage a compare to borrow because interest on debt is tax deducible, `4iereas dividends are not Accordingly, an increase in the tax rate means that the after-tax cost of debt capital will decrease, Given equal interest rates, a firm with a high tax rate 4lI have a lower after- tax cost of debt capital than a firm with a low tax rate.
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