Rover Corporation would like to transfer excess cash to its sole shareholder, Aleshia, who is also an employee. Aleshia is in the 24% tax bracket, and Rover is subject to a 21% rate. Because Aleshia's contribution to the business is substantial, Rover believes that a $51,600 bonus in the current year is reasonable compensation and should be deductible by the corporation. However, Rover is considering paying Aleshia a $51,600 dividend because the tax rate on dividends is lower than the tax rate on compensation. Answer the following questions to determine whether Rover is correct in believing that a dividend is the better choice.

a. Regarding taxes, which would benefit Aleshia the most? The $51,600 the bonus. b. Regarding taxes, which would benefit Rover Corporation the most? The $51,600 because after taxes she would have from the dividend and from because it would save Rover in taxes. c. Considering the two parties together, which alternative would provide the most overall tax savings? The $51,600 savings is because when the overall effect to both the corporation and the shareholder are considered the net tax