The Barryman Drilling Company is planning an on-market buyback of $1 million worth of the<\/p>
company's 500000 shares, which are currently trading at a price of $10. Stan Barryman is the founder<\/p>
of the company and still holds 10000 company shares, which he originally purchased for $8 per share<\/p>
(more than 12 months ago).<\/p>
<\/p>
a) If Stan decides to sell 2000 of his shares for $10 a share, what will be his after-tax<\/p>
proceeds if his personal marginal tax rate is 47%?<\/p>
<\/p>
b) The Barryman Drilling Company is reconsidering its plan to buy back $1 million of its<\/p>
ordinary shares and instead plans to pay a $1 million fully franked cash dividend, which<\/p>
amounts to $2 per ordinary share. If the company tax rate is 30% and Stan Barryman's<\/p>
personal marginal tax rate is 47%, what tax liability does this create for him? What will<\/p>
be Stan's after-tax proceeds from the dividend distribution?<\/p>", "transcribed_text": "", "related_book": { "title": "The Changing Geography Of Banking And Finance", "isbn": "1441947205, 978-1441947208", "edition": "1st Edition", "authors": "Pietro Alessandrini ,Michele Fratianni ,Alberto Zazzaro", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/2024\/03\/66050c9f889e3_94366050c9f62f22.jpg", "uri": "\/textbooks\/the-changing-geography-of-banking-and-finance-1st-edition-978-1441947208-260622", "see_more_uri": "" }, "free_related_book": { "isbn": "172825941X", "uri": "\/textbooks\/secrets-of-the-sprakkar-iceland-s-extraordinary-women-and-how-they-are-changing-the-world-1st-edition-978-1728259413-144577", "name": "Secrets Of The Sprakkar Iceland S Extraordinary Women And How They Are Changing The World", "edition": "1st Edition" }, "question_posted": "2024-06-10 02:18:31", "see_more_questions_link": "\/study-help\/questions\/business-banking-2021-September-12", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/what-is-the-minimum-height-to-which-gamma-quanta-source", "description": "What is the minimum height to which a gamma quanta source containing excited Zn67 nuclei has to be raised for the gravitational displacement of the Moss Bauer line to exceed the line width itself,...", "stars": 3 }, { "url": "\/1-500-flights-land-each-day-at-san-joses-airport", "description": "1.) 500 flights land each day at San Jose's airport. 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