Charleston Corporation (CC)now Operates as a "Regular" Corporation,but It Is

question 37

Multiple Choice

Charleston Corporation (CC) now operates as a "regular" corporation,but it is considering a switch to S Corporation status.CC is owned by 100 stockholders who each hold 1% of the stock,and each faces a personal tax rate of 35%.The firm earns $3,700,000 per year before taxes,and since it has no need for retained earnings,it pays out all of its earnings as dividends.Assume that the corporate tax rate is 34% and the personal tax rate is 35%.How much more (or less) spendable income would each stockholder have if the firm elected S Corporation status?

• A) $10,139
• B) $7,605
• C) $8,177
• D) $8,749
• E) $6,787

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Definitions:

Civil Rights Protestors

Individuals or groups who engage in activism or demonstrations to advocate for the enforcement and expansion of rights and equality for minority groups.

Gang Wars

Conflicts and violent struggles between organized groups or gangs, often related to territorial disputes, criminal activities, or ideological differences.

Murders

The unlawful premeditated killing of one human being by another.

Nonviolent Drug Offenses

Legal violations involving the possession, use, or distribution of drugs that do not involve violence or the threat of violence.