You are a shareholder in a C-corporation. The company earns $4.50 per share before taxes. Assume...

You are a shareholder in a C-corporation. The company earns $4.50 per share before taxes. Assume the corporate tax rate is 40%. After paying taxes it will apply its Payout Ratio of 90% and pay dividends accordingly. Assumed the personal income (dividend and non-dividend income) tax rate is 25%.
1. What is the (per share) corporate tax payment?
2. What is the dividend?
3. What is the (per share) personal tax payment?
4. What is the (per share) after tax income?
5. Repeat steps a-d assuming the firm is an S-corporation.

Expert Solution

NO INTERMEDIATE ROUNDING IS DONE. ALL ANSWERS ARE WRITTEN IN FULL, NO ROUNDING IS DONE

jeff jeffy answered 2 months ago

You are a shareholder in a "C" corporation. This corporation earns $4 per share before taxes....

You are a shareholder in a "C" corporation. This corporation earns $4 per share before taxes. After it has paid taxes, it will distribute the remainder 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 21% and your tax rate on dividend income is 15%. The effective tax rate on your share of the corporation's earnings is closest to: Select one:...

You are a shareholder in a C corporation. The corporation earns $36 per share before taxes....

You are a shareholder in a C corporation. The corporation earns $36 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 25% and the personal tax rate on dividend income is 42% . How much is left for you after all taxes are paid?

You are a shareholder in a C corporation. The corporation earns $2.12 per share before taxes....

You are a shareholder in a C corporation. The corporation earns $2.12 per share before taxes. Once it has paid taxes it will distribute the rest of its earnings to you as a dividend. Assume the corporate tax rate is 38%and the personal tax rate on (both dividend and non-dividend) income is 25% How much is left for you after all taxes are paid? The amount that remains is _____ per share. (Round to the nearest cent.)

You are a shareholder in a C corporation. The corporation earns$ 2.03 per share before taxes....

You are a shareholder in a C corporation. The corporation earns$ 2.03 per share before taxes. Once it has paid taxes it will distribute the rest of its earnings to you as a dividend. Assume the corporate tax rate is 38 % and the personal tax rate on (both dividend and non-dividend) income is 20 % How much is left for you after all taxes are paid?

You are a shareholder in C corporation. The Corporation earns $28 per share before taxes. Once...

You are a shareholder in C corporation. The Corporation earns $28 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 33%, and the personal tax rate on the dividend income is 24%. How much is left for you after all taxes are paid? The amount that remains is $___ per share. (Round to 2 decimals.)

You are a shareholder in an S corporation. The corporation earns $2.49 per share before taxes....

You are a shareholder in an S corporation. The corporation earns $2.49 per share before taxes. As a pass-through entity, you will receive $2.49 for each share that you own. Your marginal tax rate is 25%. How much per share is left for you after all taxes are paid? The amount that remains is ____ per share. (Round to the nearest cent.)

You are a shareholder in a corporation. The corporation earns $4 per share before taxes. Once...

You are a shareholder in a corporation. The corporation earns $4 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 34% and the personal tax rate on dividend income is 25%. 1. How much is left for you after all taxes are paid? 2. What is your total effective tax rate?

You are a shareholder in a C corporation. The corporation earns $ 2.41 per share before...

You are a shareholder in a C corporation. The corporation earns $ 2.41 per share before taxes. Once it has paid taxes it will distribute the rest of its earnings to you as a dividend. Assume the corporate tax rate is 35 % and the personal tax rate on (both dividend and non-dividend) income is 30 %. How much is left for you after all taxes are paid?

Consider a C corporation. The corporation earns $2 per share before taxes.

Consider a C corporation. The corporation earns $2 per share before taxes. After the corporation has paid its corresponding taxes, it will distribute 50% of its earnings to its shareholders as a dividend. The corporate tax rate is 35%, the tax rate on dividend income is 20%, and the personal income tax rate is set at 28%. What are the shareholder's earnings from the corporation after all corresponding taxes are paid?

A C corporation earns $10 per share before taxes. After it has paid taxes, it will...

A C corporation earns $10 per share before taxes. After it has paid taxes, it will distribute the rest of its earnings as dividends. The dividend is income to you, so you will pay taxes on these earnings. The corporate tax rate is 40% and your personal dividend tax rate is 15%. How much of the earnings remain after all taxes are paid? a) $0.90 b) $ 4.00 c) $6.00 d) $5.10 Correct answer is C) need to show steps...

Question