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School
University of Ottawa *
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Course
2352X
Subject
Finance
Date
Jan 9, 2024
Type
png
Pages
1
Uploaded by AdmiralFlagSeaUrchin26
16)
You
own
100
shares
of
a
publicly
traded
Canadian
Corporation.
The
corporation
earns
$5.00
per
share
before
taxes.
Once
the
corporation
has
paid
any
corporate
taxes
that
are
due,
it
will
distribute
the
rest
of
its
earnings
to
its
shareholders
in
the
form
of
a
dividend.
If
the
corporate
tax
rate
is
40%
and
your
personal
tax
rate
on
(both
dividend
and
non-dividend)
income
is
30%,
then
how
much
money
is
left
for
you
after
all
taxes
have
been
paid?
A)
$210
B)
$300
C)
$350
D)
$500
Answer:
A
Explanation:
EPS
x
number
of
shares
x
(1
-
Corporate
Tax
Rate)
x
(1
-
Individual
Tax
Rate)
$5.00
per
share
x
100
shares
x
(1
-
.40)
x
(1
-
.30)
=
$210
Diff:3
Type:
MC
Topic:
1.1
The
Three
Types
of
Firms
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