You are a shareholder in a corporation. The corporation earns $20 per share before taxes. After it has paid taxes, the corporation chooses to retain this cash. The corporate tax rate is 30% and your tax rate on dividend income is 10% How much of the earnings remain after all taxes are paid? Selected Answer: a. 14$ Answers a. 14$

SWFT Comprehensive Volume 2019
42nd Edition
ISBN:9780357233306
Author:Maloney
Publisher:Maloney
Chapter17: Corporations: Introduction And Operating Rules
Section: Chapter Questions
Problem 11DQ
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Question
You are a shareholder in a corporation, The corporation earns $20 per
share before taxes. After it has paid taxes, the corporation chooses to retain
this cash.
The corporate tax rate is 30% and your tax rate on dividend income is 10%.
How much of the earnings remain after all taxes are paid?
Selected Answer:
a. 14$
Answers:
a. 14$
b. 12.65
C 18$
Transcribed Image Text:You are a shareholder in a corporation, The corporation earns $20 per share before taxes. After it has paid taxes, the corporation chooses to retain this cash. The corporate tax rate is 30% and your tax rate on dividend income is 10%. How much of the earnings remain after all taxes are paid? Selected Answer: a. 14$ Answers: a. 14$ b. 12.65 C 18$
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