Charleston Corporation (CC)now Operates as a "Regular" Corporation,but It Is

question 5

Multiple Choice

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 $2,000,000 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?

• A)$ 2,565
• B)$ 4,420
• C)$ 8,580
• D)$11,150
• E)$13,000

---

Definitions:

Blunted

Describes a situation or condition where emotional expressions or reactions are significantly reduced or understated, often in psychological contexts.

Addictions Assessor

A professional trained to evaluate individuals for substance use disorders, providing a formal diagnosis or recommendations for appropriate treatment.

Appropriate Interventions

Strategies or actions that are suitably selected and applied in a particular context or situation to achieve desired outcomes or solve problems.

Time-Line Followback

A research method used in behavioral sciences for assessing participants' past behaviors by reconstructing them on a calendar.