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A firm is making a payment of $1000 to its investors. The firm is in the...

A firm is making a payment of $1000 to its investors. The firm is in the 29% marginal tax bracket. If this payment is made in the form of dividends to its shareholders, how much does the firm have to have in earnings to be able to make the payment? Round your answer to the nearest dollar.

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Answer #1

Amount to earn = dividend/(1-tax rate) = 1000/(1-0.29)=1409

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