You Are a Shareholder in a Corporation Which Has Elected

question 6

Multiple Choice

You are a shareholder in a corporation which has elected chapter S treatment.The corporation announces a profit of $6 per share,of which it retains $2 for reinvestment and distributes the rest as dividend payments.Given that the personal tax rate is 35%,how much tax must you pay per share?

• A)$0
• B)$2.10
• C)$2.60
• D)$3.90

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Definitions:

Industrial Concentration

A measure of the extent to which production in an industry is dominated by a few large firms.

Technological Advance

The introduction of new technologies or the improvement of existing technologies, enhancing productivity and possibly leading to economic growth.

Product Differentiation

The process of distinguishing a product or service from others in the market to make it more appealing to a particular target market.

Oligopoly Model

An economic model describing a market structure where a few firms dominate, often leading to pricing and output decisions that consider competitors' actions.