An S corporation earns $5.20 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 $3.00 dividend? O $2.43 ○ $1.62 ○ $2.84 ○ $2.03

An S corporation earns $5.20 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 $3.00 dividend? O $2.43 ○ $1.62 ○ $2.84 ○ $2.03

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter6: Accounting For Financial Management

Section: Chapter Questions

Problem 8P

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Question

An S corporation earns $5.20 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 $3.00 dividend?
O $2.43
○ $1.62
○ $2.84
○ $2.03

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