Suppose you are a shareholder in an S$-$corporation. The corporation earned $$3\mathrm{.}00$ per share this past quarter and plans to pay out all earnings as dividends. If your personal tax rate on dividend income is $25\%,$ what percentage of the earnings do you keep after paying taxes? LO$4$

You keep $25\%$ of the earnings after paying taxes.

You keep $75\%$ of the earnings after paying taxes.

You keep $77\%$ of the earnings after paying taxes.

You keep $100\%$ of the earnings because S$-$corp owners do not owe personal taxes on the corporation's earnings.