You are a shareholder in a C corporation. The corporation earns $2.382.38 per share before taxes. Once it has paid taxes it will distribute the rest of its earnings to you as a dividend. Assume the corporate tax rate is 25 %25% and the personal tax rate on all income is 20 %20%. How much is left for you after all taxes are paid?
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Step 1
Earnings before taxes = $2.38 Corporate tax rate = 25% Corporate tax = Earnings before taxes × Corporate tax rate Corporate tax = $2.38 × 0.25 = $0.595 Show more…
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