Assume that Farm Fresh Produce, Inc. is a chain of farmers' market kiosks that is organized as a corporation and operates in the upper Midwestern states.  During the current year, the business realized a "Pre-Tax Income" of $1,550,000.


Using the 21% corporate tax rate specified in the "Tax Cuts and Jobs Act" of 2017, calculate the tax liability for Farm Fresh Produce, Inc. for the current year.

Calculate the "After-Tax Earnings" for Farm Fresh Produce, Inc.
 

Assume that Farm Fresh Produce, Inc. has 825,000 shares of common stock outstanding and that the firm paid a "dividend per share" of $0.45 during the current year.  What is the value of the total dividends paid to the common shareholders of Farm Fresh Produce, Inc. during the current year?

Based on the total dividends paid to the common shareholders that you calculated, what is the value of the earnings that Farm Fresh Produce, Inc. retained for future investment during the current year?

4.  What is the average income tax rate applicable to Farm Fresh Produce, Inc. during the current year?

5.  What was the marginal income tax rate applicable to Farm Fresh Produce, Inc.?