Sonic Corporation Has a 21% Marginal Tax Rate and Received

question 56

Multiple Choice

Sonic Corporation has a 21% marginal tax rate and received $10,000 of dividends from Roller,Inc.,a U.S.corporation in which Sonic owns less than 2% of the outstanding stock.Sonic's effective tax rate on the Roller dividend is:

• A)21%
• B)0%
• C)10.5%
• D)None of the above

---

Definitions:

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, expressed as a percentage change.

Demand Function

A mathematical expression that shows the relationship between the quantity of a good consumers are willing to buy and its price.

Price Elasticity

The measure of how much the quantity demanded or supplied of a good changes in response to a change in its price.

Price Doubles

A situation where the price of a good, service, or commodity increases to twice its previous level, affecting supply and demand dynamics.