QUESTION 6

A firm that earns $1 million before tax in Brazil pays Brazilian tax of $250,000 and remits the remaining $750,000 as a dividend to its U.S. parent. It pays a 5% dividend withholding tax on its remittance. Assuming a US tax rate of 35%, the parent will owe U.S. tax on this dividend of

		$25,000
		$52,500
		$62,500
		nothing. It will also receive a foreign tax credit of $90,000.

5 points

QUESTION 7

Which one of the following securities in the foreign bond markets has the least amount of risk to the investor?

		samurai bond
		shogun bond
		convertible bond
		equity warrants