Griffey Communications recently realized $87,500 in operating income. The company had interest income of $35,000 and realized $70,000 in dividend income. The company's interest expense was $45,000. Its corporate tax rate is 25%. Griffey is a small company, so it is not subject to the interest expense deduction limitation. Assume a 50% dividend exclusion for taxes on dividends. a. $48,125 b. $39,375 c. $19,375 d. $28,125 e. $36,875
Griffey Communications recently realized $87,500 in operating income. The company had interest income of $35,000 and realized $70,000 in dividend income. The company's interest expense was $45,000. Its corporate tax rate is 25%. Griffey is a small company, so it is not subject to the interest expense deduction limitation. Assume a 50% dividend exclusion for taxes on dividends. a. $48,125 b. $39,375 c. $19,375 d. $28,125 e. $36,875
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter6: Accounting For Financial Management
Section: Chapter Questions
Problem 8P
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