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# Calculate the Amount of Dividends from a Corporation After Tax

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You are a shareholder in a corporation. The corporation earns \$2 per share before taxes. Once it has paid taxes, it will distribute the rest of its 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%.

A. How much is left for you after all taxes are paid?

B. Repeat above problem assumming the corporation is an S corporation.

#### Solution Preview

A. Earnings before tax = \$2.00 per share
Corporation Tax @40% = \$0.80 per share
Earnings after corporation tax = \$1.20 per share

Income received at the hand of the investor = \$1.20 per ...

#### Solution Summary

The solution calculates the amount of dividends from a corporation after tax.

\$2.49