Cross Border Valuation Issue Essay

9645 Words Nov 16th, 2011 39 Pages

Ninfa Borth Altadonna Jeff Fosler Susan Hua
Shawn Kennedy Brian Limurti Alex Santibanez

Valuation and Corporate Combinations
Finance 668.25
Sat., Dec. 4, 2010

I. Executive Summary 3 II. Summary of Key Terms & Concepts 3 III. Discuss various Valuation Implications and Applicability to MNC’s & global capital markets 13 IV. Discuss DCF Methods (Multiple analyses in US or Foreign comparables) 18 V. Discuss a Short Example 23 VI. Real World Company Case Study 1: 25 VII. Real World Company Case Study 2: 27 VIII. Conclusion 28

I. Executive Summary

There are many
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In addition, there is a special local corporate tax (national tax), a business tax (a local tax which is deductible from taxable income) and prefectural and municipal inhabitant taxes (also local tax), which vary depending on the locality, the amount of paid-in capital of the company, etc. The rate shown (40.69%) is the illustrative effective rate that applies for a company in Tokyo with paid-in capital of more than JPY 100 million after taking into account a deduction for business tax. Size based business tax is also levied on a company with paid-in capital of more than JPY 100 million, so the overall tax rate for such companies can be higher than 40.69%. For small and medium sized companies with paid-in capital of JPY 100 million or less, the effective tax rate in Tokyo is 42.05% with no size based business tax imposed.
3 The federal corporate income tax is applied on a sliding scale. The marginal federal corporate income tax rate on the highest income bracket of corporations (US$18.33 million for 2009) is 35%. State and local governments may also impose income taxes at rates ranging from less than 1% to 12% (top marginal rates average approximately 7.5%). A corporation may deduct its state and local income tax expense when computing its federal taxable income, generally resulting in a net effective rate of approximately 40%. The effective rate may vary significantly, depending on the locality in which a corporation

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