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if rertice is is (Aligseithmic) (10,4,10) trwat, an 5 Furer is subject to a 21% rate. Because Aleshia's contribution to the business is substantial, Rover

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if rertice is is (Aligseithmic) (10,4,10) trwat, an 5 Furer is subject to a 21% rate. Because Aleshia's contribution to the business is substantial, Rover believes that a $39,600 tor. 3 in the currert vear is reasonable compensation and should be deductible by the corporation. However, Rover is considering paying A this a 539/5006 hibend because the tax rate on dividends is lower than the tax rate on compensation. Atwint the following questions to determine whether Rover is correct in believing that a dividend is the better choice. a. Nejarbing tares, which would benefit Aleshia the most? The $37,500 because after taxes she would have $ from the dividend and $ Uie borus. b. Pegarding tares, which would benefit Rover Corporation the most? the $25,000 because it would save Rover F in taxes. C. Considering the two parties together, which alternative would provide the most overall tax savings? the $39,600 because when the overall effect to both the corporation and the shareholder are considered the net tax saings is 5

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