Lansing Corporation, a Publicly Held Company with a 21% Tax

question 71

Multiple Choice

Lansing Corporation, a publicly held company with a 21% tax rate, paid its PEO an annual salary of $2.3 million. Ignoring payroll taxes, calculate the after-tax cost of this payment.

• A) $2.3 million
• B) $1.817 million
• C) $2.09 million
• D) $0

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Definitions:

De Jure Status

A legal term that means something is recognized by law, regardless of the actual situation on the ground.

Cumulative Voting

A voting system used in corporate elections that allows shareholders to allocate all their votes to one candidate or distribute them among several candidates.

Minority Shareholders

Owners of a smaller portion of a company's shares, who do not have control or majority influence over the company's decisions.

Election

The process by which individuals select candidates to hold public office, or choose among options in referendums, through voting.