Q2 During 2020 financial year, WWC Corp received income from interest on bonds amounting to $15,000. It also has a 15% common stock holding in MW Corporation and received $25,000 income in dividend. Assume a tax rate of 40%, and assume the 70% dividend exclusion applies.

a. What are tax liabilities on interest received, and dividend received.

b. If WWC increases stock holding in MW Corp to 25%, what is the tax implication for WWC?

Range of taxable income Marginal rate

$ 0 to $ 50,000 15%

50,000 to 75,000 25

75,000 to 100,000 34

100,000 to 335,000 39

335,000 to 10,000,000 34

10,000,000 to 15,000,000 35

15,000,000 to 18,333,333 38