New Business is just being formed by 20 investors, each of whom will own 5% of the business. The firm is expected to earn $1,200,000 before taxes each year. The
corporate tax rate is 34% and the personal tax rate for the firm's investors is 24%. The firm does not need to retain any earnings, so all of its after-tax income will be
paid out as dividends to its investors. The investors will have to pay personal taxes on whatever they receive. How much additional spendable income will each
investor have if the business is organized as a partnership rather than as a corporation?
a. $6,000
b. $4,944
c. $19,464
d. $10,944
e. $15,504