Amexicorp, Inc., a producer of security systems, had sales of $400 million, cost of goods sold of $150 million, operating expenses of $100 million, and interest expense of $100 million. Amexicorp also received $10 million in dividends from other corporations in which it had less than a 20 percent ownership stake.
During the year, Amexicorp also sold for $20 million assets that is carried on its books at a book value of $17 million. Amexicorp paid preferred stock dividends totaling $10 million during the year. Common stock dividends paid were $5 million. Use the tax rates shown in Table 2A.1.
a. What is Amexicorp's after-tax net income available to common stockholders?
b. What would have been Amexicorp's after-tax net income available to common stockholders if the assets that were sold had a book value of $25 million?
|
Year
|
Taxable income
|
|
2004
|
$30,000
|
|
2005
|
80,000
|
|
2006
|
(150,000)
|
|
2007
|
125,000
|
|
2008
|
150,000
|
|
2009
|
(75,000)
|