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Market Value – Book Value | Discussion Board Homework Help

MVA = Market Value – Book Value. Consider the TCJA2017 changes to corporate tax regime in the U.S. (as discussed in our materials) and the latest corporation tax (minimum 15% tax on larger companies plan as discussed/summarized in https://www.pwc.com/us/en/services/tax/library/senate-passes-inflation-reduction-act-reconciliation-bill.html (Links to an external site.) and a proposal to increase corporate taxation to 28% as referenced in
https://www.usbank.com/investing/financial-perspectives/market-news/how-bidens-income-tax-policy-changes-could-affect-you.html (Links to an external site.)).

Q1: What effect, if any, do you think TCJA2017 had on U.S. domestic companies’ MVA(d) as opposed to the U.S. multinational companies’ (MNC) MVA(MNC)? Why?

Q2: How do the effects of TCJA2017 on MVA(MNC) vs MVA(d) compare to those o the Biden Administration proposed changes (minimum 15% tax and a hike in statutory rate to 28%)?

Q3: Do you think these effects increase U.S. companies resilience to financial shocks or decrease it? Hint: for the last question, consider potential impacts of TCJA2017 as opposed to the Biden 20223 plans on companies’ FCF in the long run vs the effects in the short run.

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