FINANCE HELP Q1 Q2 An S corporation earns 600 per share bef

FINANCE HELP:

Q1:

Q2:

An S corporation earns $ 6.00 per share before taxes. The corporate tax rate is? 35%, the personal tax rate on dividends is? 20%, and the personal tax rate on? non-dividend income is? 39%. What is the total amount of taxes paid if the company pays a $3.00 dividend?

A. $2.81

B. $3.28

C. $1.87

D. $ 2.34

Q3:

A C corporation earns $7.10 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 dividend?

A. $4.93

B. $3.52

C. $2.82

D. $ 4.22

Q4:

Helen owns 10.8?% of the stock of the Median Corporation. If Median makes a dividend payment of $25,000,000 paid proportionally to its? shareholders, how much of this amount would Helen? receive, disregarding? tax?

A. $2,160,000

B. $3,240,000

C. $3,780,000

D. $ 2,700,000

Q5:

A C corporation earns $8.50 per share before taxes and the company pays a dividend of $6.00 per share. 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? after-tax amount an individual would receive from the? dividend?

A. $5.10

B. $7.14

C. $6.12

D. $ 4.08

What is the bid - ask spread? A. O B. ° C. O D. all of the costs and fees that a stock exchange charges in order to process a transaction the difference in the selling price of a stock between different exchanges the rise or fall in the value of a stock between the time it is acquired by an investor and sold by that investor the difference in price available for an immediate sale of a stock and the immediate purchase of the stock

Solution

1. What is the bid - ask spread?

CORRECT ANSWER : D. the difference in price available for an immediate sale of a stock and the immediate purchase of the stock

2. TAX PAID = 6 X 39% = 2.34 ( S CORPORATION PAYS TAX AS PER PERSONAL TAX RATE)

CORRECT ANSWER : D : 2.34

3. CORPORATE TAX = 7.10 X 39% + PERSONAL TAX = 5 X 15%

CORPORATE TAX = 2.769 + PERSONAL TAX = 0.75

TOTAL AMOUNT OF TAXES = 2.769 + 0.75 = 3.52

CORRECT ANSWER : B : 3.52

4 . AMOUNT OF DIVIDEND = 25,000,000 X 10.8% = $2700,000

CORRECT ANSWER : D : $2700000

5. TAX PAYABLE ON DIVIDENDS = DIVIDEND PER SHARE X TAX ON DIVIDEND = 6 X 15% =0.90

SO AFTER TAX DIVIDEND = 6 -0.90 = 5.1

CORRECT ANSWER : A : $5.10