A C corporation earns $4.50 per share before taxes. The corporate tax rate is 35%, the personal tax rate on dividends is 20%, and the personal tax rate on non-dividend income is 39%. What is the total amount of taxes paid if the company pays a $2.00 dividend? A) $2.48

B) $1.98

C) $0.90

D) $1.58

Question

Business

Ayla Crawford

25 November, 18:59

A C corporation earns $4.50 per share before taxes. The corporate tax rate is 35%, the personal tax rate on dividends is 20%, and the personal tax rate on non-dividend income is 39%. What is the total amount of taxes paid if the company pays a $2.00 dividend? A) $2.48

B) $1.98

C) $0.90

D) $1.58

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Answers (1)

Know the Answer?

Rylee Cobb · Answer 1

B) $1.98

Explanation:

Corporate tax = $4.50*35%

= $1.575

Personal tax = $2.00*20%

= $0.40.

Total amount of taxes = Corporate tax + Personal tax

= $1.575 + $0.40

= $1.98

Therefore, The total amount of taxes paid if the company pays a $2.00 dividend is $1.98

A C corporation earns $4.50 per share before taxes. The corporate tax rate is 35%, the personal tax rate on dividends is 20%, and the personal tax rate on non-dividend income is 39%. What is the total amount of taxes paid if the company pays a $2.00 dividend? A) $2.48B) $1.98C) $0.90D) $1.58

A C corporation earns $4.50 per share before taxes. The corporate tax rate is 35%, the personal tax rate on dividends is 20%, and the personal tax rate on non-dividend income is 39%. What is the total amount of taxes paid if the company pays a $2.00 dividend? A) $2.48

B) $1.98

C) $0.90

D) $1.58