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You are a shareholder in a C-corporation. The corporation earns $13 per share before taxes. After paying corporate taxes, the firm distributes the rest of
You are a shareholder in a C-corporation. The corporation earns $13 per share before taxes. After paying corporate taxes, the firm distributes the rest of its earnings to you as a dividend. The dividend is income to you, so you will then pay taxes on these earnings. The corporate tax rate is 37% and your tax rate on dividend income is 26%.
What is your effective tax rate (i.e., your after-tax income/corporate earning)? Enter your answer in the following format: 0.1234 Hint: Answer is between 0.49 and 0.59
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