Assuming a tax rate of 50%, the after-tax 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

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 after-tax cost of $200,000 dividend ......after-tax is the key

the only way to get to $200,000 after-tax of 50% is to have $400,000 or more before taxes, so the after-tax cost of a $200,000 dividend payment is $400,000 or more.

Then answer must be D...none of the above....is this correct???

To find the after-tax cost of a $200,000 dividend payment with a tax rate of 50%, you need to calculate the tax owed and subtract it from the total amount.

1. Determine the tax owed: Multiply the dividend payment by the tax rate.

Tax owed = $200,000 * 0.50
= $100,000

2. Subtract the tax owed from the total amount to find the after-tax cost:

After-tax cost = Total amount - Tax owed
= $200,000 - $100,000
= $100,000

Therefore, the after-tax cost of a $200,000 dividend payment with a tax rate of 50% is $100,000.

The correct answer is B. $100,000.