Corporate market value of state corporations versus private corporations
|
|
 |
 |
 |
Simcountry is an Online Digital World where you are the President of a country. |
|
|
No download needed! |
|
|
|
Corporate market value of state corporations versus private corporations
The market price of such corporations is computed as a function of their profit (after tax) as a percentage of their revenue. The more profit they make, the higher their market value goes. A corporation that makes a profit percentage of 25% may be 4 times more valuable than one that makes 12.5% profit.
If such corporations have a lot of cash and no loans, their assets value will add to their market value while high loans and low assets value will reduce the market value.
The market value will be reduced even more, depending on the tax percentage the corporations pay. The market value depends on the profit after tax. Currently 30% tax reduced the net profit to 70% of its potential value and the market value is also reduced.
Countries that set their tax percentages very high will see high tax revenues but also lower assets and their corporations will become easy targets for a takeover as they may be profitable corporations but have a low value because of the low after-tax profit. After a takeover, the new owner may move the corporation to a low tax country, increase the market value of the corporation and make a nice profit.
Copyright ©2002-2011 w3creative.com
|
contact us
