Question

An S corporation earns 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 ​dividend?

Answer 1

$2.73

Step-by-step explanation:

Question is incomplete. But assuming the company earn per shares before tax is $7 and the company pays a dividend of $2

Hence, the total amount of taxes paid is = Company earn per shares * personal tax rate on​ non-dividend income

= $7 * 39%

= $7 * 0.39

=$2.73