Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You are a shareholder in a corporation. The corporation earns $100 per share before taxes. After it has paid taxes, it will distribute the rest

You are a shareholder in a corporation. The corporation earns $100 per share before taxes. After it has paid taxes, it will distribute 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 33% and your tax rate on dividend income is 10%. How much of the earnings remains after all taxes are paid?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of Corporate Finance

Authors: Richard Brealey

10th Global Edition

0071314172, 9780071314176

More Books

Students also viewed these Finance questions

Question

Be able to suggest some future options for human resources

Answered: 1 week ago

Question

Be able to create a contract for consultant services

Answered: 1 week ago