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Consider a C corporation. The corporation earns $8 per share before taxes. After the corporation has paid its corresponding taxes, it will distribute 89% of
Consider a C corporation. The corporation earns $8 per share before taxes. After the corporation has paid its corresponding taxes, it will distribute 89% of its earnings to its shareholders as a dividend. The corporate tax rate is 39%, the tax rate on dividend income is 26%, and the personal income tax rate is set at 20%. How much is the total effective tax rate on the corporation earnings?
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