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15. In a world with corporate taxes, the market value of a firm's assets can increase through the introduction of debt into the firm's capital

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15. In a world with corporate taxes, the market value of a firm's assets can increase through the introduction of debt into the firm's capital structure. In no more than 6 lines, comment on this statement. [4 marks) 16. The empirical evidence concerning financing decisions made by firms supports the idea that financing decisions are made randomly by firms with no real impact on firm value. In no more than 6 lines, comment on this statement. [4 marks] 17. Jensen Ltd is a firm that provides educational services tin the Australian marketplace. It is a listed company with 35,000,000 shares on issue. Jensen Ltd has just announced the results for the 2020/2021 financial year ending 30 June 2021. They report taxable income of $50,000,000 upon which they will be required to pay corporate tax at a rate of 30%. Jensen Ltd has a policy of distributing 75% of after- tax income as dividends. Paul is an Australian resident who owns 10,000 shares in Jensen Ltd and pays tax at a marginal rate of 45%. Document the total value of the dividend paid by Jensen Ltd to Paul ensuring that you account for the impact of both corporate and personal taxes. [10 marks) 15. In a world with corporate taxes, the market value of a firm's assets can increase through the introduction of debt into the firm's capital structure. In no more than 6 lines, comment on this statement. [4 marks) 16. The empirical evidence concerning financing decisions made by firms supports the idea that financing decisions are made randomly by firms with no real impact on firm value. In no more than 6 lines, comment on this statement. [4 marks] 17. Jensen Ltd is a firm that provides educational services tin the Australian marketplace. It is a listed company with 35,000,000 shares on issue. Jensen Ltd has just announced the results for the 2020/2021 financial year ending 30 June 2021. They report taxable income of $50,000,000 upon which they will be required to pay corporate tax at a rate of 30%. Jensen Ltd has a policy of distributing 75% of after- tax income as dividends. Paul is an Australian resident who owns 10,000 shares in Jensen Ltd and pays tax at a marginal rate of 45%. Document the total value of the dividend paid by Jensen Ltd to Paul ensuring that you account for the impact of both corporate and personal taxes. [10 marks)

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