Question
A company reports earnings before taxes of $5.00 per share. Assume the corporate tax rate is 30%, and the personal dividend tax rate is 25%.
A company reports earnings before taxes of $5.00 per share. Assume the corporate tax rate is 30%, and the personal dividend tax rate is 25%. The company is planning to pay all after-tax earnings to investors as dividends. What is the effective tax rate from the perspective of the investor?
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Principles Of Managerial Finance Brief
Authors: Chad J. Zutter, Scott B. Smart
8th Global Edition
1292267143, 978-1292267142
