Question

You are a shareholder in an S corporation. The corporation earns $ 2.18 per share before taxes. As a pass through​ entity, you will receive $ 2.18 for each share that you own. Your marginal tax rate is 25 %. How much per share is left for you after all taxes are​ paid?

Answer 1

$1.635

Step-by-step explanation:

Data provided in the question :

Price per share = $2.18

Marginal tax rate = 25%

Now,

The amount per share left

= Price per share - (Price per share × Marginal tax rate)

on substituting the respective values, we get

The amount per share left = $2.18 - ( $2.18 × 0.25 )

or

The amount per share left = $2.18 - $0.545

or

The amount per share left = $1.635