Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

need help with the last 4 Kraftstoff of Germany. Kraftstoff is a German-based company that manufactures electronic fuel-injection carburetor assembies for several large automobile companies

image text in transcribedneed help with the last 4

Kraftstoff of Germany. Kraftstoff is a German-based company that manufactures electronic fuel-injection carburetor assembies for several large automobile companies in Germany, including Mercedes, BMW, and Opel. The firm, lke many irms in Gemany today, is revising its financial policies in line with the increasing degree of disclosure required by firms if they wish to list their shares publicly in or out of Germany. Kraftstoffs primary proble is that the German corporate incor e a code applies a different income tax rate o inco e depending on whether t is et ned 40% or distributed o sto kholders 28%). The company's earnings before tax EBT is 485.000.000 a. If Kraftstoff planned todistribute 50% of its net income, what would be its total net income and total corporate tax bills? b lf Kraftstoff was attempting to choose between a 40% and 60% payout rate to sto holders, what arguments and values would management use in order to convince stockholders which ofthe two payouts s in everyone's best interest a. If Kraftstoff planned todistribute 50% of its net income. Calculate its total net income and toatl corporate tax bills in the following table: Round to the nearest whole euro. Kraftstoffs Income Items Eamings before taxes (EBT) Less income taxes at 28% Net income 50% payout 485,000,000 349200000 Distibuted income Less added distributed income taxes After-tax distributed income 4600 174600000 Retained income Less added retained income taxes After-tax reta ned income Total ater-tax net income Total income taxes

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

An Introduction To Real Estate Finance

Authors: Edward Glickman

1st Edition

0123786266, 9780123786265

More Books

Students also viewed these Finance questions