A Business Generates Profit of $100,000

question 36

Multiple Choice

A business generates profit of $100,000.The owner has a 39.6% marginal tax rate.What amount of corporate and individual income tax will be paid on this profit if the business is a regular corporation and no income is distributed?

• A)Corporate tax,$22,250; individual tax,$39,600
• B)Corporate tax,$22,250; individual tax,$0
• C)Corporate tax,$0; individual tax,$39,600
• D)Corporate tax,$22,250; individual tax,$15,550

---

Definitions:

Stock Index

A measurement of the performance of a group of stocks, which represents a portion of the overall market.

Anticipated Dividend

Expected payment of dividends from a stock, often based on the company's earnings forecasts or past dividend payments.

Anticipated Dividend

The expected payment of dividends by a company to its shareholders in the future.

Risk-Free Rate

The theoretical rate of return of an investment with zero risk, often represented by the yield on government Treasury bills.