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LO.4,8 Kristen, the president and sole shareholder of Egret Corporation, has earned a salary bonus of $30,000 for the currei year. Because of the lower
LO.4,8 Kristen, the president and sole shareholder of Egret Corporation, has earned a salary bonus of $30,000 for the currei 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 28% for Kristen and 34% for Egret Corporation. a. How much better off would Kristen be if she were paid a dividend rather than b. How much better off c. If Egret Corporation pays Kristen a salary bonus of $40,000 instead of a $30,000 d. What should Kristen do? salary? rather than a dividend? dividend, how would your answers to (a) and (b) change? would Egret Corporation be if it paid Kristen a salary
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