Susan owns all the debt and equity that is issued by Pinder Ltd. Pinder Ltd has an EBIT of $450,267. Of that EBIT, Pinder Ltd pays interest expenses of $220,693 and distributes all net income as dividends. The corporate tax rate is 35%, and Susan’s personal income tax rate is 44%, applicable to both dividend and interest income. Susan currently lives under the classical tax system. Based only on the information above, how much more after-tax income would Susan have earned from interest and dividends under an imputation tax system? (round to the nearest two decimal places) $45,996.91 $44,496.03 $44,996.50 $45,496.84 None of the other answers.
Susan owns all the debt and equity that is issued by Pinder Ltd. Pinder Ltd has an EBIT of $450,267. Of that EBIT, Pinder Ltd pays interest expenses of $220,693 and distributes all net income as dividends. The corporate tax rate is 35%, and Susan’s personal income tax rate is 44%, applicable to both dividend and interest income. Susan currently lives under the classical tax system. Based only on the information above, how much more after-tax income would Susan have earned from interest and dividends under an imputation tax system? (round to the nearest two decimal places) $45,996.91 $44,496.03 $44,996.50 $45,496.84 None of the other answers.
Chapter13: Choice Of Business Entity—general Tax And Nontax Factors/formation
Section: Chapter Questions
Problem 35P
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Susan owns all the debt and equity that is issued by Pinder Ltd. Pinder Ltd has an EBIT of $450,267. Of that EBIT, Pinder Ltd pays interest expenses of $220,693 and distributes all net income as dividends. The corporate tax rate is 35%, and Susan’s personal income tax rate is 44%, applicable to both dividend and interest income. Susan currently lives under the classical tax system. Based only on the information above, how much more after-tax income would Susan have earned from interest and dividends under an imputation tax system? (round to the nearest two decimal places)
$45,996.91
$44,496.03
$44,996.50
$45,496.84
None of the other answers.
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