Question

please answer

ca parations can raise capital using either al must par interest) or cality Cand are expect pal diredends). However, the interest expell I tax deductible while dividends paid cannon deducted. How much pre-tax income mustacan with a tax ate of 351 need to earn persn to pay aut $1.95 per share in dividends? har ansuar should be between 1.57 and 6.12 Tranded to a decimal places, with no special Icharacters, Ther debt ano Expected to much ore dividend rest cxpense that musta campany Intershare

Answer 1

Answer:

Assuming 100% dividend payout:

Earning per share = Net Income per share = $1.95

Tax rate = 35%

Per share pre-tax income required = 1.95 / (1 - Tax Rate) = 1.95 / (1 - 35%) = $3.00

Required pre-tax income per share required = $3.00