Assignment:
How would each of the following changes tend to affect aggregate (that is, the average for all corporations) payout ratios, other things held constant? Explain your answers.
a. An increase in the personal income tax rate.
b. A liberalization of depreciation for federal income tax purposes—that is, faster tax write-offs.
c. A rise in interest rates.
d. An increase in corporate profits.
e. A decline in investment opportunities.
f. Permission for corporations to deduct dividends for tax purposes as they now do interest charges.
g. A change in the Tax Code so that both realized and unrealized capital gains in any year were taxed at the same rate as dividends.
Provide complete and step by step solution for the question and show calculations and use formulas.