Rodger Owns 100% of the Shares in Trevor Inc

question 60

Essay

Rodger owns 100% of the shares in Trevor Inc., a C corporation. Assume the following for the current year:Trevor Inc.'s pre-tax income = $16,000Trevor Inc.'s marginal tax rate = 35%Percentage of after-tax earnings retained by Trevor Inc. = 0% (i.e. all after-tax earnings distributed)Rodger's dividend tax rate = 5%Given these assumptions, how much cash does Rodger have from the dividend after all taxes have been paid?

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Definitions:

Female-headed Families

Households led by women, often highlighted in discussions on poverty, social policy, and income support due to unique socioeconomic challenges.

Social Insurance

programs designed to provide financial protection against certain life risks (e.g., old age, disability, unemployment) funded by contributions from employers, employees, or both.

Social Security

A government program that provides financial assistance to people with little or no income, mostly the elderly or disabled.

Food Stamp Program

A government assistance program that provides low-income individuals and families with funds to purchase groceries, aiming to reduce hunger and improve nutrition.