Kristen, the president and sole shareholder of Egret Corporation, has earned a salary bonus of $$108,500$ for the current year. Because of the lower tax rates on qualifying dividends, Kristen is considering substituting a dividend for the bonus.

Assume that the tax rates are $24\%$ for Kristen and $21\%$ for Egret Corporation. Round your answers to nearest dollar, if required.

a$.$ How much better off would Kristen be if she were paid a dividend rather than salary?

If Kristen were paid a bonus, she would receive $ after taxes. If Kristen receives a dividend rather than salary, she would receive $ after taxes. Thus, she would be better off by receiving the

b$.$ How much better off would Egret Corporation be if it paid Kristen a salary rather than a dividend?

The net after$-$tax cost of the bonus for Egret Corporation would be $$ and the net after$-$tax cost for the dividend would be $

$.$ Therefore, Egret would be better off by $

if it paid the

c$.$ Assume Egret Corporation paid Kristen a salary bonus of $$141,050$ instead of a $$108,500$ dividend.

If Egret Corporation were to pay Kristen a salary bonus of $$141,050$ instead of a $$108,500$ dividend, Kristen would receive $ after taxes. The bonus would cost Egret

Corporation $ after taxes.

d$.$ What should Kristen do$?$

Both Egret Corporation and Kristen are better off with the