Question

In: Finance

A C corporation earns $ 8.00 per share before taxes. The corporate tax rate is​ 39%,...

A C corporation earns $ 8.00 per share before taxes. The corporate tax rate is​ 39%, the personal tax rate on dividends is​ 15%, and the personal tax rate on​ non-dividend income is​ 36%. What is the total amount of taxes paid if the company pays a $ 4 ​dividend?

A. $4.46

B. $3.72

C. $2.98

D. $5.21

Solutions

Expert Solution

The dividend amount is taxed two times. one is in the hands of company and in the hands of dividend receiver.

Tax in hands of company :-

Corporate tax =8 * 39% = $ 3.12

Tax in the hands of dividend receiver :-

Personal tax rate = 4 * 15% = 0.6

Total taxes = $ 3.12 + 0.6 = $ 3.72

Option B is correct.

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

A C corporation earns $12.82 per share before taxes. The corporate tax rate is 39%, the...
A C corporation earns $12.82 per share before taxes. The corporate tax rate is 39%, the personal tax rate on dividends is 15%, and the personal tax rate on non-dividend income is 36%. What is the total amount of taxes paid if the company pays a $6.66 dividend?
A C corporation earns $4.30 per share before taxes. The corporate tax rate is 35%, the...
A C corporation earns $4.30 per share before taxes. The corporate tax rate is 35%, the personal tax rate on dividends is 20%, and the personal tax rate on non-dividend income is 39%. What is the total amount of taxes paid if the company pays a $3.00 dividend?
Consider a S corporation. The corporation earns $2 per share before taxes. The corporate tax rate...
Consider a S corporation. The corporation earns $2 per share before taxes. 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 $5.90 per share before taxes. Thecorporate tax rate is 35%, the...
A C corporation earns $5.90 per share before taxes. The corporate tax rate is 35%, the personal tax rate on dividends is 20%, and the personal tax rate on non-dividend income is 39%. What is the total amount of taxes paid if the company pays a $2.00 dividend?A. $2.47B. $1.97C. $2.96D. $3.45
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?
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?
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...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT