1) Which of the following is/are an advantage of incorporation? A) Access to cap
ID: 2796152 • Letter: 1
Question
1) Which of the following is/are an advantage of incorporation? A) Access to capital markets B) Unlimited life C) Limited liability D) All of the above 2) You own 100 shares of a "C" oorporation. The corporation earns $5.00 per share before taxes. Onoe the corporation has paid any corporate taxes that are due, it will distribute the rest of its earnings to its shareholders in the form of a dividend. If the corporate tax rate is 40% and your personal tax rate on (both dividend and non-dividend) income is 30%, then how much money is left for you after all taxes have been paid? A) S210 B) 5300 C) S350 D) S500Explanation / Answer
1) The option D) All of the above is correct.
Explanation:
All the points A), B) & C) are the features of a incorporation. Therefore, the option D) All of the above is correct.
2) The option A) $210 is Correct.
Explanation:
Earnings before taxes = 100 shares *$5.00 = $500
Less Corporation taxes @ 40% = $200 ($500*40%)
Balance = $300
Less: Personal Tax @ 30% = $90 ($300*30%)
Balance money left = $210
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