An S corporation earns $6.30 per share before taxes. The corporate tax rate is 35%, the personal tax rate ondividends is 20%, and the personal tax rate on non-dividend income is 39%. What is the total amount of taxes paidif the company pays a $3.00 dividend?A. $1.97B. $2.95C. $3.44D. $2.46OC

In S corporation the income is directly transferred to the shareholders of the company and there is…

Answered: An S corporation earns $6.30 per share…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter2: The Domestic And International Financial Marketplace

Section2.A: Taxes

Problem 3P

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An S corporation earns $6.30 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?