Question
Assume the corporate tax rate is 22 percent, the personal tax rate on interest income is 15 percent, and the personal tax rate on dividends
Assume the corporate tax rate is 22 percent, the personal tax rate on interest income is 15 percent, and the personal tax rate on dividends is 10 percent. Also assume the firm earns $5 per share in taxable income and pays out 40 percent of its earnings. How much will a shareholder receive per share in aftertax income?
Assume the corporate tax rate is 22 percent, the personal tax rate on interest income is 15 percent, and the personal tax rate on dividends is 10 percent. Also assume the firm earns $5 per share in taxable income and pays out 40 percent of its earnings. How much will a shareholder receive per share in aftertax income?
a. $1.232
b. $1.404
c. $1.470
d. $1.782
e. $1.096
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