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Exercise 2 (6 points) You are a shareholder in a corporation. The corporation earns $6.50 per share before taxes. After it has paid taxes, it
Exercise 2 (6 points) You are a shareholder in a corporation. The corporation earns $6.50 per share before taxes. After it has paid taxes, it will distribute the rest of its earnings to you as a dividend. The dividend is income to you, so you will then pay taxes on these earnings. The corporate tax rate is 40% and your tax rate on dividend income is 15%. 2 How much of the earnings remains after all taxes are paid? * (4 Points) Enter your answer 3 Calculate your total effective tax rate. * (2 Points)
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