fundamentals of corporate finance 11th canadian edition By Stephen A. Ross Test bank
A) $5.20
B) $3.60
C) $2.80
D) $1.60
E) $1.45
211) You are a shareholder in a corporation. The corporation earns $8 per share before taxes. After it has paid taxes, it will distribute the rest of its earnings to you as dividend. The corporate tax rate is 35% and your personal tax rate on dividend income is 20%. What is the amount of personal tax on dividend?
A) $5.20
B) $4.40
C) $2.80
D) $1.04
E) $0.56
212) You are a shareholder in a corporation. The corporation earns $8 per share before taxes. After it has paid taxes, it will distribute the rest of its earnings to you as dividend. The corporate tax rate is 35% and your personal tax rate on dividend income is 20%. What is the amount of your after-tax earnings on dividend?
A) $5.20
B) $4.16
C) $3.36
D) $2.28
E) $1.04
213) You are a shareholder in a corporation. The corporation earns $8 per share before taxes. After it has paid taxes, it will distribute the rest of its earnings to you as dividend. The corporate tax rate is 35% and your personal tax rate on dividend income is 20%. What is the amount of combined taxes paid by you and the corporation for each share?
A) $3.84
B) $4.40
C) $2.80
D) $5.20
E) $1.04
214) You are a shareholder in a corporation. The corporation earns $8 per share before taxes. After it has paid taxes, it will distribute the rest of its earnings to you as dividend. The corporate tax rate is 35% and your personal tax rate on dividend income is 20%. What fraction of the corporation’s earnings per share before the taxes did you ‘take home’ after paying taxes?
A) 45.00%
B) 47.50%
C) 51.25%
D) 52.00%
E) 55.00%
215) Which of the following is NOT an advantage of a corporate form of business?
A) Limited personal liability of owners
B) Unlimited life
C) Ease of ownership transfer
D) Subject to fewer regulations
E) Ease of raising capital
216) Which of the following is NOT a disadvantage of a proprietorship?
A) Unlimited liability of owner
B) Limited ability to raise capital
C) Agency problem
D) Difficulty of ownership transfer