Capital
Capital questions and answers
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Q: What is capital structure and how to identify whether the company is more on debt or equity financing?
Can you please explain what is the reason that cause the company's capital structure is more on debt financing and why?Also,explain what is the reason that cause the company's capital structure is more on equity financing and why?
A: Debt Finance -
Pros
-Maintain control of the company
-No stock issuing costs
-No regulatory requirements
Cons
-Poorer net asset position
-Interest
-Can be difficult to obtain large loans
Equity Finance
Pros
-Can obtain alot of money within a relatively short time
-No interest payments
-Maintain liquidity and asset ratios
Cons
-Strict regulations for public companies
-Transfer control to shareholders
-Large brokerage fees
Just a few off the top of my head
Q: How much capital would be possible to borrow to start a business?
I'm going to need quite a bit of capital but I don't want to have investors, so how much money could I borrow from a bank in an ideal situation. Also is there any other way to get capital without investors?
A: No lender will talk to you unless you provide them with a valid business plan. Go to http://www.sba.gov , http://www.score.org or http://www.bplan.com for sample business plans and instructions on how to write a business plan.
Then, go to http://www.score.org/ and in the upper left hand corner, enter your zip code. On the next screen, you will get information on the nearest SCORE chapter. Call them and arrange for a free meeting with a SCORE counselor to review your business plan and discuss various loan options available to you.
SCORE is a nonprofit association dedicated to entrepreneur education and the formation, growth and success of small business nationwide. SCORE is a resource partner with the U.S. Small Business Administration (SBA).
SCORE has 389 chapters in locations throughout the United States and its territories, with 10,500 volunteers nationwide. Both working and retired executives and business owners donate time and expertise as business counselors.
Q: What's the difference between capital stock and retained earnings?
I am stuck using the accounting equation...
When you pay rent it decreases cash but does it decrease capital stock or retained earnings?
If you receive cash for fees earned, it increases cash but does it increase capital stock or retained earnings?
If you pay salaries does it decrease retained earnings or capital stock?
If you pay dividends it decreases cash but what else?
If you pay interest what does it decrease?
These are questions in the book that it says I should know how to do but I don't. If you feel that you don't want to give me the answers, than just tell me how? PLEASE, THANKS.
A: When you pay rent, it decreases cash and increases a rent asset, or it decreases a rent liability if rent were paid after the fact.
Retained earnings doesn't decrease. It is merely a running total of the profit that the company keeps at the end of each accounting year. It is only changed once per year after you close out your accounts, so it won't change when all of these little accounts change mid-year.
Capital stock and retained earnings have nothing to do with the items posted, but I'm not sure about the dividends one. I don't know what other account would be affected.
Q: What are the different ways in which capital can be transferred from suppliers of capital?
What are the different ways in which capital can be transferred from suppliers of capital to those who are demanding capital.
A: Through the curcular graph. From households, to firms, to....
Q: What are the capital gains taxes on the sale/purchase of a summer home?
I am considering selling a beach house and buying another beach house. I would realize about a $500K capital gain on the house I sell. If I buy another beach house with the proceeds of the sale, will I be liable for capital gain taxes when I roll the money into a purchase of like kind?
A: You may be able to do a 1031 exchange if the property is used for investment or business. This will allow you to delay paying taxes on the gain. See the link to the IRS website that discusses the issue.
My advice would be to consult a CPA to ensure everything is done properly.
I am a CPA and would be happy to help you. Feel free to email me.
Q: How do i find information on capital structure for certain companies?
I'm trying to figure out the capital structure of AT&T and Verizon, and while I know what capital structure is, I don't know how to glean it from the stock pages my professor referenced- it seems to me that I'd need to use Hoovers, but I don't have access to that. Does anyone know of a good way get capital structure information for these companies ASAP? It's for an assignment I need to get in right away.
A: Your professor is trying to get you to learn how to read financial statements.
The capital structure of a company is seen in the equity section of the balance sheet.
Go to www.sec.gov and search the EDGARS for specific company filings (you're looking for the 10-K and 10-Q).
Q: What is the allowable capital gain on the sale of my primary residence before I have to pay capital gain tax?
I've heard that for selling my primary home that I've owned for some time, I can make a $500K profit before having to capital gain taxes, is that correct?
A: If you are married and lived in and owned the house two of the five years before you sell, the first $500,000 in gain is tax free. It is $250,000 if you are single.
Q: How do I stop unsolicited Capital One applications coming to my old address?
Of all the stupid mailers, this one worries me the most! Capital One continues to send 'pre-approved' applications to me, but they go to my old address. Junk mail is one thing, but this is a risk to my credit as far as I'm concerned. Were it not for an honest tenant who gives them to me along with other junk mail that still finds it's way to his door - where I used to live over 2 years ago! - it could otherwise be possible for some crook to sign the app off in my name and risk my credit rating being compromised! Nearly every 6 months - like clocwork, that application is delivered. I live in Canada and am unaware of any government campaign available to opt out of this stupid mailer. And I've even returned the app with 'Not Interested' written in boldface over the whole damn application. Capital One is either too stupid or too stubborn to stop the mailer. Any suggestions?
A: You can opt out of mailing offers for credit cards and insurance. If that don't work, my personal revenge would be to take the business reply envelope and tape something heavy to the envelope like say....a brick, after shoving the application back into the envelope. Write "not interested" in a permanent marker on the brick. Mail the brick to them. They have to pay for that postage. I can almost guarantee you that mailing a brick will get someones attention. They should never send another application again.
Q: How do Capital Gain Taxes work on a commerical building ? See my example?
I bought a commerical building in 2000 for 80K. Selling now for 380K. What will own in capital gain durring tax time ?
A: You have been allowed depreciation over 39 years, so you have about 20% of the cost already depreciated. If you have not made improvements to the property, your basis is about $64K and your gain is about $316K (minus sales commissions). You will pay long-term capital gains taxes of 15% on the gain, or about $47K.
If you have made improvements to the property, you would add that to the basis, and subtract depreciation on the improvements over the years you had those improvements in place, to arrive at your adjusted basis. Then subtract your adjusted basis from $380K to arrive at the gain.
Q: Can I offset a realized capital loss against mutual fund capital gain distributions?
This is the year for losses, it appears. But some of my mutual funds are still paying capital gain and income distributions. Can I offset the losses?
A: yes and you can carry any loss in excess of the gain to you 1040 up to $3000. Losses over that amount must be carried to the following year.
Q: How does capital gain tax work on selling 1st house?
We bought and lived in a house for about 1year before moving out of state for job reason. We later bought another house in the new state, while keeping the first house. It has been 2 years since then, and now we plan to sell the first house. The first house has never been a rental property. How does capital gain tax work when selling the 1st house? Thanks.
A: You can each exempt $250,000 from capital gains, or $500,000 total gain from the sale.
Q: Is a capital loss carry over applied to deduct income when filing taxes considered a tax credit?
Reason I ask is I'm planning on not itemizing for 2008 next year and I have capital loss carry over to apply however. I want to take the standard deduction and also use the carry over. Can I still do that even though I'm not itemizing?
A: A capital loss carryover is NOT an itemized deduction. It's an above the line adjustment and applies whether you itemize or not. You do need to file Form 1040 to take it but itemizing or not itemizing isn't a factor.
And no, it is NOT a credit, just an adjustment that reduces your AGI and therefore your taxable income.
Q: How much capital do you need to start swing trading stocks?
When I say capital, I dont mean the amount I need if I want to make living out of it.Just want teh requirements for say, 1-2 trades per day.
A: you don't need much at all.
especially with the picks the site below gives you.
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Q: how to avoid capital gain tax while selling a land and buying house?
My wife has a land in Orissa. We are planning to sell that land and purchase an apartment in Karnataka. The apartment price is more than the proceedings from the sale of land. Hence I am planning to take loan for the additional amount. My wife is unemployed.
How we can avoid paying Capital Gain Tax and how I can get the tax exemption on home loan?
A: Mr. HMT answer is my answer.
Land means agricultural land ??.
In case if it is a agricultural land then there is not tax on it. Agricultural land is exempt from capital gains. The conditions are given below. Read it in the website.
http://www.taxworry.com/2007/01/agriculture-land-sale-is-tax-free-but.html
Q: What is the argument strongest against capital punishment?
What do you think is the strongest argument against capital punishment is?
What are two of the best reasons to not have capital punishment?
A: There are no good reason's to oppopse capital punishment.
Here are my reason's for the death penalty:
-it serves due justice (the punishment fits the crime), and serving due justice is the NO.1 job of a court of law
-it shows that we are tough on crime
-it gets bang for the taxpayers buck
-criminals given the DP have a 0% recidivism rate
-It holds people responcible for the horrible content of their character. This fulfills what MLKJ always wanted: judge not by the color of your skin, but by the content of your character. The characterof these criminals warrants death
-It holds the criminal responcible for his actions
-appeals and **** aside, it's cheaper then prison
-it decreases the prison population, which saves even more taxpayers money
-Because the death penalty is the punishment given by a neutrel judge, there is no vengance in it. Therefore, there is no moral objection to be had with the death penalty.
-The death penalty defends human rights by establishing a mentality that "we will not tolerate any violation of any innocent person's human right's
And here are my deconstruction of the reason's against it
-The Death Penalty is an act of vengeance.
Capital Punishment couldn’t be an act of vengeance when the judge who sentences these monsters to death is a neutral decider. The criminal never did anything to the judge, and he never did anything to the citizens on the jury. The criminal is condemned by unbiased forces that hear the evidence and then come to a decision; therefore, there is no vengeance in the death penalty. The only vengeance that anybody has to take in regards to capital punishment is the victim’s family, and they do not get to decide what happens to the criminal.
-The Death Penalty is racially biased.
How quickly America forgets about this line from the pioneer of African-American rights, Martin Luther King Jr.: “I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character.” Should the character of these criminals just be shoved out the door simply because they are in a minority? No way! Claiming that capital punishment is “racially biased” is judging a criminal by the color of their skin, not the content of their character. Luther would never have wanted that.
-The death penalty is economically biased.
Now this is just anti-American. We also might as well have communism so that way everyone has an “equal chance.” In America-a nation whose economy is free enterprise-people can afford better cars than others, better houses than others, better doctors than others, and in this case, better lawyers than others. Justice is not supposed to be for sale, but here is the equalizer with the court system: everyone that is charged with a crime is given a lawyer. Not everyone is given a car, a house, or a doctor, but everyone is given a lawyer. It doesn’t matter that people like O.J Simpson can afford a top-of-the-line lawyer like Johnny Cochran. By that logic, it is also not fair that Magic Johnson can afford top-notch health care for his HIV infection while others can’t, and that athletes like Chauncey Billups and Pudge Rodriguez get millions of dollars a year for playing a game while other professions-like doctors and teachers-don’t get a quarter as much. Life is not always fair, and America is not a nation of Robin Hood economics and laws, end of story.
-The death penalty is unconstitutional according to the 8th Amendment
If that was the case, then the judges in previous generations wouldn’t have condemned atrocious criminals to the electric chair, and they wouldn’t have punished them through hangings. This generation is the most desensitized generation in American history. Previous generations would puke if they saw movies like Saw, The Decent, Cry Wolf, and Wolf Creek. On the other hand, this generation enjoys and sometimes even laughs at these slasher films; so for many of today’s Americans and judges to claim that capital punishment is “cruel and unusual” is just hypocritical.
Not only is the death penalty not unconstitutional; methods like lethal injection aren’t harsh enough. If a man rapes a woman or molests little children, he should be castrated, put in a jail cell where he is allowed to writhe in pain for 24 hours, and finally executed via shotgun. If somebody stabs a blameless person to death, he should be guillotined. And if someone chokes a guiltless person to death, like Steven Grant did, he should be hung high to dry. The punishment should fit the crime, and there is nothing “cruel and unusual” about it.
-Innocent victims may die through the death penalty, because for every seven people we put to death, one is exonerated.
This is bizarre:: The public says that it is perfectly fine to be promiscuous because there’s “only a 15 percent chance of contacting an STD,” even though STD’s can prematurely take your life; yet it’s not okay to rightfully punish evil monsters because of the “intolerably high” error rate of 17 percent. That is hypocrisy at its worst; not to mention terribly immoral.
If Americans are so worried about “innocent victims” dying, then convicted felons should not be punished at all. What if “innocent victims” are sent to jail for life? One out of seven people is just not that much at all, and as DNA evidence becomes more available, the amount of not guilty people that are put on death row is only going to get smaller and smaller (it is actually now at a 95% success rate)
The death penalty is 100 percent justified and 100 percent morally right. It is the punishment that America must use on all heinous criminals, and reestablishing it as a national reprimand will greatly help restore the United States to what it once was until morals became relative: a nation that does what is ethical, not what is popular