Warm-Up Exercises

All problems are available in MyLab Finance

  1. Learning Goal 1

    E19–1 Santana Music is a U.S.-based MNC whose foreign subsidiary had pretax income of $55,000; all after-tax income is available in the form of dividends to the parent company. The local tax rate is 40%, the foreign dividend withholding tax rate is 5%, and the U.S. tax rate is 34%. Compare the net funds available to the parent corporation (a) if foreign taxes can be applied against the U.S. tax liability and (b) if they cannot.

  2. Learning Goal 3

    E19–2 Assume that the Mexican peso currently trades at 12 pesos to the U.S. dollar. During the year, U.S. inflation is expected to average 3%, while Mexican inflation is expected to average 5%. What is the current value of one ...

Get Principles of Managerial Finance, 15th Edition now with the O’Reilly learning platform.

O’Reilly members experience live online training, plus books, videos, and digital content from nearly 200 publishers.