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

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Definitions:

Middle Ear

The section of the ear between the eardrum and the oval window that amplifies sound waves through the ossicles to the inner ear.

Amplifies Sound Waves

Increases the magnitude or intensity of sound waves, making them louder or more pronounced.

Pitch

The perceived frequency of a sound, determining its highness or lowness, often measured in hertz (Hz).

Frequency Of Sound

The number of sound waves that pass a fixed point in a unit of time, measured in Hertz (Hz), determining the pitch of the sound.