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show work please! Kristen, the president and sole shareholder of Eoret Corporation, has earned a salary bonus of $277,500 for the current year. Because of
show work please!
Kristen, the president and sole shareholder of Eoret Corporation, has earned a salary bonus of $277,500 for the current 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 24% for Kristen and 21% for Egret Corporation. Round your answers to nearest dollar, if required. a. How much better off would Kristen be if she were pald a divldend rather than satary? If kristen were paid a bonus, she would recelve after taxes, If Kristen receives a dividend rather than salary, she would receive : after taxes, Thus, she would be better off by recelving the 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 and the net after-tax cost for the dividend would be Therefore, Ioret would be better off ty 4 if it paid the Fribse: rocivition Partaly conect c. Assume Egret coiporation paid Kristen a salary bonus of $760,750 instead of a $277.500 dividend. If Earet Corporation were to par Ioristen a salary bonus of $360,750 instead of a $277,500 dividend, Kristen would recelve X after taxes, The bones would cost turet corporotion : ater taxes Step by Step Solution
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