Tax credits a us-based mnc has a foreign subsidiary that, Ask an Expert

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Tax credits A U.S.-based MNC has a foreign subsidiary that earns $255,000 before local taxes, with all the? after-tax funds to be available to the parent in the form of dividends.

The applicable taxes consist of a 38% foreign income tax rate, a foreign dividend withholding tax rate of 9.3%?, and a U.S. tax rate of 28%.

Calculate the net funds available to the parent MNC if:

a. Foreign taxes can be applied as a credit against the MNC's U.S. tax liability.

b. No tax credits are allowed.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92860841

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