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Heading 1 Subtitle Styles Pane 1) Moncton Meats is a

corporation that earned $3 per share before it paid any

taxes. The firm retained $1 of earnings for reinvestment,

and distributed what remained in dividend payments. You

hold 20,000 shares of Moncton Meats. The corporate tax

rate is 30%, dividend earnings are taxed at 20%, and the

personal income tax rate is 40%. a) What is the amount of

the dividend per share? (1 mark) b) What is the total value

of your dividends received after all taxes are paid? (1

mark) c) suppose instead that Moncton Meats is a sole

proprietorship, and you are the owne Explain how the sole

proprietorship is taxed differently from the corporation.

Calculate your per share after-ta earnings from the sole

proprietorship, assuming you pay the same dividend per

share as in part a). Also calculate the difference in your

after-tax earnings between being the sole proprietor and

being a shareholder in the corporation. (3 marks) 2) Go to

the Toronto Stock Exchange website at tmx.com. Look up

the stock market quote for Barrick Gold Corporation (go to

the top right comer, scroll over \"Get Quote\" and enter

\"ABX\". Click \"Go\".) Scroll down and click on the

Financials tab. This will bring up the most recent balance

sheet. You can also access the cash flow and income

statements by clicking the appropriate links. You can

expand each item to view the subcategories by clicking on

the item. For example, click on current assets to find the

amount of cash on the balance sheet. Note that the

numbers displayed are in millions, and units may need to

be adjusted for some of the calculations below. Use the

annual information from the 2014 financial statements, as

well as the information under the \"Quote\" tab (market

cap, shares outstanding). Some of your final answers will

depend on when you access the information, and I will

provide a range of numbers for the solutions to these

questions in the assignment solution. Calculate the

following ratios (show the inputs for each calculation. Each

question is worth 1 mark. Total 9 marks): a) Market-to-

book ratio b) Current ratio c) Quick ratio d) Gross Margin

e) Operating Margin Net Profit Margin g) ROA h) ROE

Solution

Part a:

EPS after taxes = EPS before taxes x (1- tax rate)

= $3 x (1-0.30)

= $2.10

Dividend per share = EPS – Addition to retained earnings

per share

= $2.10 - $1

= $1.10

Part b:

Total dividend received= Dividend per share x No. of

shares x (1- tax rate)

= $1.10 x 20,000 x (1-

0.20)

= $17,600

Part C

If it was a sole proprietorship firm, they had to pay

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96% Sun 6:29 PM a -1 [Compatibility Mode] Search in Document AaBbCCDdEee Caption Normal No spacing Heading 1 Subtitle Styles Pane 1) Moncton Meats is a corporation that earned $3 per share before it paid any taxes. The firm retained $1 of earnings for rei nvestment, and distributed what remained in dividend payments. You hold 20,000 shares of Moncton Meats. The corporate tax rate is 30%, dividend earnings are taxed at 20%, and the personal income tax rate is 40%. a) What is the amount of the dividend per share? (1 mark) b) What is the total value of your dividends received after all taxes are paid? (1 mark) c) suppose instead that Moncton Meats is a sole proprietorship, and you are the owne Explain how the sole proprietorship is taxed differently from the co rporation. Calculate your per share after-ta earnings from the sole proprietorship, assuming you pay the same dividend per share as ...
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