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Charleston Corporation (CC) now operates as a "regular" corporation,but it is considering a switch to S Corporation status.CC is owned by 100 stockholders who each hold 1% of the stock,and each faces a personal tax rate of 35%.The firm earns $2,800,000 per year before taxes,and since it has no need for retained earnings,it pays out all of its earnings as dividends.Assume that the corporate tax rate is 34% and the personal tax rate is 35%.How much more (or less) spendable income would each stockholder have if the firm elected S Corporation status?
Service Business
A form of enterprise offering non-physical goods or services to its clients instead of tangible products.
Pet Groomer
A professional who provides hygiene and aesthetic care for pets, such as bathing, hair cutting, and nail clipping.
Grocer
A retail merchant or shop that specializes in selling food and other household supplies.
Lawn Care Company
A business that specializes in maintaining and beautifying outdoor grassy areas, gardens, or landscapes.
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