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    Dividend explained in this solution

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    You are a share holder in a C corporation. The corporation earns $2 per share before taxes. Once it has paid taxes it will distribute the rest of the earnings to you as a dividend. The corporation tax rate is 40% and the personal tax rate on (both dividend and non-dividend) income is 30%. How much is left for you after all of the taxes are paid?

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    The corporation tax rate is 40%. The amount of tax on the earnings of $2 ...

    Solution Summary

    The solution explains the amount of dividends left after corporate and personal tax.