Question
Asked Feb 17, 2020
2 views

An S corporation earns $ 7.20 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 $ 6.00 dividend?

check_circle

Expert Answer

Step 1

The earnings per share is $7.20.

The personal tax rate on non-dividend income is 36%.

Step 2

The amount of total tax paid is calculated below:

Finance homework question answer, step 2, image 1

...

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.

Related Finance Q&A

Find answers to questions asked by student like you
Show more Q&A
add
question_answer

Q: . If you borrow $25,000 from a local finance company and you are required to pay $4,424.50 per year ...

A: Given values: Present value (PV) is $25,000. Annual payments (PMT) are $4,424.50. Maturity period (N...

question_answer

Q: An investor can design a risky portfolio based on two stocks, A and B. The standard deviation of ret...

A: The question is based on the concept of Minimum variance portfolio. A minimum variance portfolio is ...

question_answer

Q: Janet and James purchased their personal residence 15 years ago for $312,500. For the current year, ...

A: As per TCJA (Tax Cuts and Jobs Act), the amount of the interest that is qualified for the deduction ...

question_answer

Q: Explain the formula for cum dividends

A: Distribution of profit to shareholders occurs mostly in the form of dividends. Though, high growth c...

question_answer

Q: 5. You are evaluating the performance of two portfolio managers, and you have gathered annual return...

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for y...

question_answer

Q: Date Name Section 8.7 - Worksheet The Cost of Home Ownership Comparing Mortgage Interest for 30-year...

A: Loan payment formula can be used as below to calculate monthly payment Answer: Monthly payment is o...

question_answer

Q: 7. Assume that you purchased an 8 percent, 20-year, $1,000 par, semiannual payment bond priced at $1...

A: Bonds are the debt instrument which are generally issued at fixed interest. Some bonds have a defini...

question_answer

Q: According to the Liquidity Preferences Model, these are the expected first impact (short run) coming...

A: Liquidity preference hypothesis could be a demonstrate that proposes that a speculator ought to requ...

question_answer

Q: Salte Corporation is issuing new common stock at a market price of $27.00. Dividends last year were ...

A: The below expression can be used to calculate cost of common equity: