You Are a Shareholder in a "C" Corporation

question 29

Multiple Choice

You are a shareholder in a "C" corporation.This corporation earns $4 per share before taxes.After it has paid taxes,it will distribute the remainder of its earnings to you as a dividend.The dividend is income to you,so you will then pay taxes on these earnings.The corporate tax rate is 21% and your tax rate on dividend income is 15%.The effective tax rate on your share of the corporation's earnings is closest to:

• A)15%.
• B)33%.
• C)45%.
• D)50%.

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Definitions:

Long-Range Plan

A detailed roadmap designed by an organization to guide its direction, actions, and decisions over a period of years, focusing on achieving strategic goals.

Functional Plan

A strategic action plan for a specific department focusing on its unique objectives and methods.

Strategic Plans

Defining organizational goals, devising action plans, and allocating resources to meet long-term objectives.

Action Directions

Guidelines or instructions designed to steer activities towards the achievement of specific goals or objectives.