Posted by
**Jason** on
.

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

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?