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The corporation earns $6 per share before taxes. Once it has paid taxes it will distribute the rest of its earnings to you as a
The corporation earns $6 per share before taxes. Once it has paid taxes it will distribute the rest of its earnings to you as a dividend. The corporate tax rate is 40% and the personal tax rate on (both dividend and non-dividend) income is 30%.
a) How much is your dividend after all taxes are paid if you own a C corporation?
b) How much is your dividend after all taxes are paid if you own an S corporation?
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