An S Corporation Earns $7

question 32

Multiple Choice

An S corporation earns $7.40 per share before taxes.The corporate tax rate is 39%,the personal tax rate on dividends is 15%,and the personal tax rate on non-dividend income is 36%.What is the total amount of taxes paid if the company pays a $5.00 dividend?

• A)$2.66
• B)$2.89
• C)$3.75
• D)$5.54

---

Definitions:

Nuclear Families

A family structure consisting of two parents (a mother and a father) and their children, considered the traditional family unit.

Cohesive

Characterized by unity; sticking together tightly or working well together to form a whole.

Complexity

The state or quality of being intricate or complicated, often involving multiple interconnected parts.

Noncustodial Father

A father who does not have legal custody of his child, often having certain rights like visitation while the child resides primarily with the other parent.