Walter White is a 35% shareholder and president of Dead Drop Corporation, a calendar year C corporation. The board of directors of Dead Drop decided to pay Walter a $87,000 bonus for the current year based on his outstanding performance. The directors want to pay Walter the $87,000 as salary, but Walter thinks he may want to receive it as a dividend.

REQUIRED: If Walter White is in the 37% marginal tax bracket regardless of the treatment of the bonus, answer the following (support your written answer with calculations, and ignore the net investment income tax and any employment tax considerations).

A. From Walter's perspective:

It would be most beneficial for Walter White to receive the $87,000 bonus as a _______ BECAUSE...

(Answer should specify salary or dividend, should include a short written explanation as to why salary or dividend is preferred, AND MUST include calculation to support the written answer)

B. From Drop Dead's perspective:

It would be most beneficial for Drop Dead to pay out the $87,000 bonus as a ________ BECAUSE...

(The answer should specify salary or dividend, should include a short written explanation as to why salary or dividend is preferred, AND MUST include calculation to support the written answer).