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 in the $21\%$ bracket.

Because Aleshia's contribution to Rover's profit is substantial, Rover believes that a $$58,800$ bonus in the current year is reasonable compensation and should be deductible in full. However, Rover is considering paying Aleshia a $$58,800$ dividend because Aleshia's tax rate on dividends is lower than the corporate 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 $$58,800$

dividend

because after taxes she would have $fill in the blank $2$

from the dividend and $fill in the blank $3$

from the bonus.

b$.$ Regarding taxes, which would benefit Rover Corporation the most?

The $$25,000$

bonus

because it would save Rover $fill in the blank $5$

in taxes.

c$.$ Considering the two parties together, which alternative would provide the most overall tax savings?

The $$58,800$

bonus

because when the overall effect to both the corporation and the shareholder are considered the net tax savings is $fill in the blank $7$