Rodger Owns 100% of the Shares in Trevor Inc $= \$ 16,000$

question 10

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 $= \$ 16,000$
Trevor Corp's marginal tax rate $= \mathbf { 3 5 \% }$
Percentage of after-tax earnings retained by Trevor Corp $= 0 \%$ (i.e., all after-tax earnings distributed)
Rodger's dividend tax rate $= \mathbf { 5 } \%$ Given these assumptions, how much cash does Rodger have from the dividend after all taxes have been paid?

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