tax rate was 30% and dividend eangs were taxed at 12 mained in dividend payments i...

Question

Question

Answer 1

Answer #1

Answer

--The correct answer is Option 'B' $ 133,000

A	Earnings per share before taxes	$ 3.60
B	Tax rate	30%
C = A x B	Income tax expense per share	$ 1.08
D = A - C	Earnings after tax	$ 2.52
E	Amount retained	$ 1.00
F = D - E	Amount distributed as dividend per share	$ 1.52
G	No. of shares	100,000
H = F x G	Total Dividend received by holder	$ 152,000.00
I	Dividend earnings tax rate	12.50%
J = H x I	Tax on dividend earnings	$ 19,000.00
K = H - J	Value of dividend earnings after tax	$ 133,000.00
K = H - J	Correct Answer	Option 'B': $ 133,000

Answer 2

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