Question
7. Suppose that the controlling stock of IBM Corporation was placed in a perpetual trust with an irrevocable clause that cash or liquidating dividends would
7.
Suppose that the controlling stock of IBM Corporation was placed in a
perpetual trust with an irrevocable clause that cash or liquidating dividends
would never be paid out of this trust. Earnings per share continued to grow.
What would be the value of the company to the stockholders? Why?
8.
Why is the growth rate in earnings and dividends of a company likely to
taper off in the future? Could the growth rate increase as well? If it did, what
would be the effect on stock price?
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
