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Problem 19-48 (Algorithmic) (LO. 4) Kristen, the president and sole shareholder of Egret Corporation, has earned a salary bonus of $277,500 for the current
Problem 19-48 (Algorithmic) (LO. 4) Kristen, the president and sole shareholder of Egret Corporation, has earned a salary bonus of $277,500 for the current y 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, 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 salary, she would receive s 41,625 X after taxes. If Kristen receives a dividend rather than 41,625 X after taxes. Thus, she would be better off by receiving the dividend Feedback Check My Work 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 s dividend would be bonus Feedback Check My Work 277,500 183,150 X and the net after-tax cost for the Therefore Egret would be better off by s 183,150 X if it paid the
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