Mr. Longwood and Mrs. Kennett are the equal shareholders in LK Corporation. Both shareholders have a 39.6 percent marginal tax rate on ordinary income. LK's financial records show the following: 
a. Compute the combined tax cost for LK, Mr. Longwood, and Mrs. Kennett attributable to LK's operations.
b. How would your computation change if the interest on the shareholder debt was $175,000 and LK paid no dividends?
Definitions:
Dramatic Nature
The quality of being strikingly emotional or theatrical in character or events.
Emotional Response
refers to the psychological reaction to an event or information, characterized by feelings such as happiness, anger, fear, or sadness.
Threats
Statements or actions that aim to cause harm or force someone to do something against their will.
Persistence
The continued effort to achieve an objective despite challenges or obstacles.
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