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A C corporation earns $ 8.80 per share before taxes. The corporate tax rate is​ 39%, the personal tax rate on dividends is​ 15%, and the personal tax rate on​ non-dividend income is​ 36%. What is the total amount of taxes paid if the company pays a $ 6 ​dividend?

Respuesta :

Answer:

The dividends taxes are $0.90

Explanation:

For the dividend, it will apply the dividend tax rate.

The other tax rates are irrelevant.

[tex]dividends \times (1-tax \:rate) = after-tax \: dividends[/tex]

[tex]6\times (1-.15) = 6 \times 0.85 = 5.10[/tex]

[tex]dividends \times tax \:rate = dividends \: tax[/tex]

[tex]6\times 0.15 = 0.90[/tex]