金融学原理Principles-of-Finance双语课件-06-Business-Organizations-and-the-Tax-Environment.ppt

1、Chapter 6uSole Proprietorship-unincorporated business owned by one individualuSole ProprietorshipuPartnership-unincorporated business owned by two or more personsuSole ProprietorshipuPartnershipuCorporation-legal entity created by a state,separate and distinct from its owners and managers,having unl

2、imited life,easy transferability of ownership,and limited liabilityuSole ProprietorshipuPartnershipuCorporationFcorporate charter is filed with the state providing information about the company and directorsuSole ProprietorshipuPartnershipuCorporationFcorporate charter is filed with the state provid

3、ing information about the company and directorsFbylaws are for internal management and proceduresBoard of DirectorsVP ManufacturingVP Finance(CFO)VP MarketingControllerTreasurerTaxDepartmentFinancialAccountingCost AccountingCredit ManagerInventoryManagerDirector ofCapitalBudgetingPresidentuStockhold

4、er wealth maximizationFconsiders the risk and timing associated with expected earnings per share in order to maximize the price of the firms common stockuStockholder wealth maximizationuManagerial incentives to maximize shareholder wealthuStockholder wealth maximizationuManagerial incentives to maxi

5、mize shareholder wealthuSocial responsibilityuStockholder wealth maximizationuManagerial incentives to maximize shareholder wealthuSocial responsibilityuStock price maximization and social welfareuProfit MaximizationFWill profit maximization also result in stock price maximization?uProfit Maximizati

6、onFConsider:vtotal corporate profit versus earnings per share(EPS)vtiming of earningsvrisk of projectvrisk of financingvdividend payout versus reinvestmentuOwner/principal hires an agent and delegates decision-making authority to that agent to act on behalf of the principaluAgency problem exists whe

7、n conflict of interest between principal and agentFbetween stockholders and managersFbetween stockholders and creditorsuThe threat of firinguThe threat of hostile takeoverFdue to underpriced stockFmay be warded off with poison pill or greenmailuStructuring management incentivesFexecutive stock optio

8、nsFperformance sharesuCreditors lend based on expectationsFriskiness of the firms existing assetsFexpectations concerning the riskiness of future asset additionsFthe firms existing capital structureFexpectations concerning future capital structure changes(amount of debt)uStakeholders must be treated

9、 fairlyuLegal constraintsuGeneral level of economic activityuTax lawsuConditions in the stock marketuAntitrust lawsuEnvironmental regulationsuProduct and workplace safety regulationsuEmployment practice rulesuFederal reserve policyuInternational developmentsuTypes of product or services produceduPro

10、duction methods useduRelative use of debt financinguDividend policyuExpected profitabilityuTiming of cash flowsuDegree of riskuStock priceuCompanys attitude and conduct toward its stakeholders(employees,customers,stockholders)uEthical behavior requires fair and honest treatment toward all partiesuAv

11、oids fines and legal expensesuBuilds public trustuAttracts business from customers who appreciate and support the firms policiesuAttracts and keeps employees of the highest caliberuSupports the economic viability of the communities in which it operatesuPublic limited company(PLC)uAktiengesellshaft(A

12、G)uSociedad Annima(SA)uIndustrial groupsFkeiretsuFchaeboluOperate in more than one countryFTo seek new marketsFTo seek raw materialsFTo seek new technologyFTo seek production efficiencyFTo avoid political and regulatory hurdlesuDifferent currency denominationsuDifferent currency denominationsuEconom

13、ic and legal ramificationsuLanguage differencesuCultural differencesuDifferent currency denominationsuEconomic and legal ramificationsuLanguage differencesuCultural differencesuRole of governmentsuDifferent currency denominationsuEconomic and legal ramificationsuLanguage differencesuCultural differe

14、ncesuRole of governmentsuPolitical riskuCount on changesFindexed itemsFnew tax lawsuProgressive tax:higher tax on higher incomesuTaxable income is gross income minus exemptions and allowable deductionsuMarginal tax rate is the tax on the last unit of incomeuAverage tax rate is taxes paid divided by

15、taxable incomeuDividends are paid out of earnings that have already been taxeduInterest on most state and local government bonds(municipals)is not subject to federal income taxesEquivalent pre-tax yield on a taxable investmentYield on tax-free investment1-Marginal tax rate=A taxpayer in the 30%margi

16、nal tax bracket who could buy a municipal bond that yields 10%would have to receive a before-tax yield of 14.3%on a corporate or US Treasury bond to have the same after-tax yield.10%1 0.3014.3%uInterest paid by individuals is generally not deductible,with the exception of mortgage interestuCapital g

17、ains versus ordinary incomeFprofit from sale of capital assetFbenefits of long-term capital gainsuBusiness versus personal expensesuInterest and dividend income received by a corporationF70%of dividends received by another corporation is excluded from taxable incomeuInterest and dividends paid by a

18、corporationFinterest is deducted from incomeuCorporate capital gains Fcurrently taxed at same rateuCorporate loss carryback and carryoverFlosses can be carried back 2 years and carried over to the next 20 yearsuAccumulated earnings taxuConsolidated corporate tax returnsFif own 80%or moreuS Corporati

19、onsFsmall corporation that elects to be taxed as a proprietorship or partnership yet retains limited liability and other benefits of incorporatingI.DevelopedMarketsTax RateAustralia36.0%Canada44.6France36.7Germany57.4/44.1Italy53.2Japan51.6Netherlands35.0Switzerland28.5United Kingdom31.0United States40.0II.Emerging Markets Tax RateBrazil25.0Chile15.0China,PR33.0India35.0Indonesia30.0Korea30.8Malaysia30.0Mexico34.0Philippines35.0Thailand30.0uExpensing the price of a long-term asset over timeBusiness Organizations and the Tax Environment