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A C corporation earns $8.30 per share before taxes and the company pays a dividend of $4.00 per share. 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 after-tax amount an individual would receive from the dividend?

Respuesta :

Answer:

$3.4

Explanation:

The computation of the after-tax amount that received from dividend is shown below:

The Dividend is $4 per share

And, the tax on dividend is 15%

So, after tax amount after receiving the dividend is

= dividend - dividend × tax on dividend

= $4 - $4 × 15%

= $4 - $0.6

= $3.4

It is to be paid by the corporation it is not the liability of an investor

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