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School

University of Ottawa *

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Course

2352X

Subject

Finance

Date

Jan 9, 2024

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1

Uploaded by AdmiralFlagSeaUrchin26

17) You own 100 shares of a Canadian Income Trust Corporation. The corporation earns $5.00 per share before taxes. Once the corporation has paid any corporate taxes that are due, it will distribute the rest of its earnings to its shareholders in the form of a dividend. If the corporate tax rate is 40% and your personal tax rate on (both dividend and non-dividend) income is 30%, then how much money is left for you after all taxes have been paid? A) $210 B) $300 C) $350 D) $500 Answer: C Explanation: EPS x number of shares x (1 - Individual Tax Rate) $5.00 per share x 100 shares x (1 - .30) = $350 Diff:3 Type: MC Topic: 1.1 The Three Types of Firms
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