Posted by Jason on Friday, July 25, 2008 at 12:45pm.
Assuming a tax rate of 50%, the aftertax cost of a $200,000 dividend payment is?
A. $200,000
B. $100,000
C. $100,000
D. none of the above
please talk me through this one ...I am completely lost

finance dividend payment  Jason, Friday, July 25, 2008 at 1:12pm
I had a light bulb go off above my head.
this question is not about the math or numbers...it is a play on words.....
the aftertax cost of $200,000 dividend ......aftertax is the key
the only way to get to $200,000 aftertax of 50% is to have $400,000 or more before taxes, so the aftertax cost of a $200,000 dividend payment is $400,000 or more.
Then answer must be D...none of the above....is this correct???
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