Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. leslie participates in ibos nonqualified deferred

Leslie participates in IBOs nonqualified deferred compensation plan. For 2018, she is deferring...

60.1K

Verified Solution

Question

Accounting

Leslie participates in IBOs nonqualified deferred compensation plan. For 2018, she is deferring 10 percent of her $300,000 annual salary. Based on her deemed investment choice, Leslie expects to earn a 7 percent before-tax rate of return on her deferred compensation, which she plans to receive in 10 years. Leslies marginal tax rate in 2018 is 32 percent. IBOs marginal tax rate is 21 percent (ignore payroll taxes in your analysis). (Use Table 3, Table 4.) (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)

c. Assuming IBOs cost of capital is 8 percent after taxes, how much deferred compensation should IBO be willing to pay Leslie that would make it indifferent between paying 10 percent of Leslies current salary or deferring it for 10 years?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Basic Math
1.2K views

A math professor claims that the standard deviation of IQ scores of the students majoring in...

Biology
1.2K views

QUESTION 11 You have discovered a single sequence of the complemen CCT

Physics
1.2K views

A particle of mass 4gm is moving simple harmonically with a period 8 sec and...

Geometry
1.2K views

AABC is an isosceles triangle segment AB and AC are congruent AAPQ is isosceles which...

Basic Math
1.2K views

Use a double-angle formula to find the exact value of the given expression.2 cos105 -1

Accounting
1.2K views

Categorize each of the following activities as to which management responsibility it fulfills: planning,...

Accounting
1.2K views

Which of the following is a true statement? Group...

Accounting
1.2K views

[IAS37 - Provision, Contingent Assets and Contingent Liabilities] Indicate which one may give rise to...

Accounting
1.2K views

just e8.11 The company anticipated that the restorers would work a total of 12.000...

Accounting
1.2K views

Wascana Photography Services sells and services a variety of high-end photography equipment for professional photographers....

Finance
1.2K views

Consider the two (excess return) index-model regression results for stocks A and B. The risk-free...

Finance
1.2K views

An Insurance Company wants to calculate the CLTV of a client who is expected to...