ValiantCorp Is a Corporation That Earned $3 Per Share Before

question 47

Multiple Choice

ValiantCorp is a corporation that earned $3 per share before it paid any taxes. ValiantCorp retained $1 of after tax earnings for reinvestment, and distributed what remained in dividend payments. If the corporate tax rate was 30% and dividend earnings were taxed at 12.5%, what was the value of the dividend earnings received after tax by a holder of 100,000 shares of ValiantCorp?

• A) $104,750
• B) $96,250
• C) $110,000
• D) $112,500

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