A C corporation earns $7.80 per share before taxes. The corporate tax rate is 39%, the personal tax rate on dividends is 15%, and the personal tax rate onnon-dividend income is 36%. What is the total amount of taxes paid if the company pays a $4 dividend?A. $2.91B. $4.37C. $5.10D. $3.64

Therefore, the total tax amount is $3.64.

Answered: A C corporation earns $7.80 per share…

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

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A C corporation earns $7.80 per share before taxes. The corporate tax rate is 39%, the personal tax rate on dividends is 15%, and the personal tax rate on non-dividend income is 36%. What is the total amount of taxes paid if the company pays a $4 dividend? A. $2.91 B. $4.37 C. $5.10 D. $3.64