Question

Asked Feb 17, 2020

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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?

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:

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