Answer Posted / a.b.

Firms try to issue equity under the guise of debt because
the firm can take a deduction on all interest paid
throughout the year. Thus, the firm can enjoy pass-through
taxation, theoretically, on the payment of the interest
because those dollars are tax-free. This reduces the
overall taxable income of the firm, which reduces the tax
burden, which may even result in more money to distribute as
dividends to those equity holders. It's a win-win situation
for all, except the IRS. Thus, the IRS/Congress created 385
of the Internal Revenue Code which allows the IRS to
evaluate corporate debt to determine if it is essentially
equity under the guise as debt and treat it as such.

The above answers regarding the nature of debt and equity
are correct for the most part, but do not go far enough to
answer the question asked.

why your choseing bank of america

2826

---

Income Tax Department sends cheque for INR 2 Crore as Refund after completion of Assessment for A.Y.2011 - 2012 to a Company. As per IT Return filed for this year I.T. due to Government was INR 60 Lac but was assessed at INR 70 Lac. TDS due to Company was INR 3 Crore which was admitted as INR 2.7 Crore by Government. Government also adjusts Tax dues for A.Y. 2009 - 2010 of INR 40 Lac which was disputed earlier by the Company and Appeal was lying with the CIT. Government pays Interest to the Company amounting to INR 40 Lac. Provision for Income Tax made by the Company in its accounts for F.Y. 2010 - 2011 (A.Y. 2011 - 2012) was INR 50 Lac. What would be the Journal Entry at the time of receipt of Refund of INR 2 Crore from the Government in A.Y. 2014 - 2015 in the books of the Company?

2566

---

Is form 38 mandatory to issue c form in up. thru online mode

1823

---

what is mean by tax holiday?

2634

---

what is rate of service tax and form no. of service tax ? wt rules of service tax a particuler once .?

2529

---

MY QUESTION IS THAT IS WHEY WE SELL THE UPS IN THE MARKET BUY FROM THE IMPORT WHAT THE DUTY WE WILL FORWARD TO THEM.

2365

---

Occasionally it is said that issuing convertible bonds is better than issuing stock when the firms shares are undervalued. Suppose that the financial manager of Decent Furniture Company does in fact have inside information indicating that the decent stock price is too low. Decent furniture earnings will in fact be higher than investor’s expectations. Suppose further that the inside information cannot be released without giving away a valuable competitive secret. Clearly, selling shares at the present low price would harm Decent’s existing shareholders. Will they also lose if convertible bonds are issued? If they do lose in this case, is the loss more or less than it would be if common stock is issued? Now suppose that investors forecast earnings accurately, but still under value the stock because they overestimate Decent’s actual business risk. Does this change your answer to the questions posed in the preceding paragraph? Explain.

2741

---

analyses of Cost control

2412

---

How often is the stock market ticker updated? 15sec? 30sec?

2883

---

I want to know that , If we called a person for one day for drive our company van or any other purpose. so how it will accounted in our (i.e companies) Books of accounts....

1313

---

Is it possible to list only a portion of Equity Shares leaving the balance as unlisted?

3120

---

when will be appsc exams will held pls give me the dates

2682

---

how to solve the problem of sechdule date problem in sap proframme.

2512

---

what is correct accounting treatment for preliminary exps and pre-operative Expsas per AS 26? or any other applicable AS?

2808

---

I want to validate Customer credit payment with customer invoice, When billing time, the system check the customer credit payment, if customer credit is lesser than customer bill, system should not allow the billing further process. Can I configure in sap

2240

---