Posted by Jason on .
Assuming a tax rate of 50%, the after-tax cost of a $200,000 dividend payment is?
D. none of the above
O.K., given a $200,000 after-tax dividend payment and a 50% tax bracket. That means the company had at least $400,000 or more before taxes.
The after-tax cost of a $200,000 dividend payments could be $200,000 or more.
I think the answer is A or D, could you guide me toward the correct answer?