Question

As a corporation, you want to distribute money to shareholders as a dividend. If the dividend is taxed at a rate of 20% and the dividend is $1 per share, how much money will a shareholder of 10,000 shares get after-tax

Answer 1

a) 8,000

Step-by-step explanation:

Answer 2

$8,000

Step-by-step explanation:

If the dividend is $ 1 per share, a shareholder with 10,000 shares will get

=1 x 10,000 = $10,000

If the tax rate is 20% , the tax due will be

=20% of $10,000

=20/100 x 10,000

=0.2 x 10,000

=$2,000

the shareholder will get $10,000 -$2000

=$8,000