Marcus is the CEO of publicly traded ABC Corporation and earns a salary of $1,500,000. Assume ABC

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Marcus is the CEO of publicly traded ABC Corporation and earns a salary of $1,500,000. Assume ABC has a 35 percent marginal tax rate.
a. What is ABC's after-tax cost of paying Marcus's salary?
b. Now assume that Marcus, in addition to the $1.5 million salary, earns a performance-based bonus of $500,000. What is ABC's after-tax cost of paying Marcus's salary?
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Taxation Of Individuals And Business Entities 2015

ISBN: 9780077862367

6th Edition

Authors: Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

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