Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Consider a C corporation. The corporation earns $1.5 per share before taxes. After the corporation has paid its corresponding taxes, it will distribute 95% of

Consider a C corporation. The corporation earns $1.5 per share before taxes. After the corporation has paid its corresponding taxes, it will distribute 95% of its earnings to its shareholders as a dividend. The corporate tax rate is 30%, the tax rate on dividend income is 20%, and the personal income tax rate is set at 28%. What are the shareholder's earnings from the corporation after all corresponding taxes are paid? How much is the total effective tax rate on the corporation earnings? Note: Express your answers in strictly numerical terms. For example, if the answer is 5%, enter 0.05 as an answer; or if the answer is $500, write enter 500 as an answer."

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Smart Bitcoin Investor What Are The Advantages Of Bitcoins

Authors: Mohamed Mendieta

1st Edition

979-8353162049

More Books

Students also viewed these Finance questions

Question

Identify and describe business and whitecollar crimes.

Answered: 1 week ago