You are a shareholder in a C corporation. The corporation earns $4 per share before taxes. Once it has paid taxes, it will distribute the rest of its earnings to you as a dividend. The corporate tax rate is 21%, and the personal tax rate on dividend income is 20%. How much is left for you after all taxes are paid? The amount that remains is $ _ per share. (Round to 2 decimals.)

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Question
You are a shareholder in a C corporation. The corporation earns $4 per share
before taxes. Once it has paid taxes, it will distribute the rest of its earnings to you
as a dividend. The corporate tax rate is 21%, and the personal tax rate on
dividend income is 20%. How much is left for you after all taxes are paid? The
amount that remains is $
_ per share. (Round to 2 decimals.)
Transcribed Image Text:You are a shareholder in a C corporation. The corporation earns $4 per share before taxes. Once it has paid taxes, it will distribute the rest of its earnings to you as a dividend. The corporate tax rate is 21%, and the personal tax rate on dividend income is 20%. How much is left for you after all taxes are paid? The amount that remains is $ _ per share. (Round to 2 decimals.)
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