Finance (aftertax cost)
posted by Jason .
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
O.K., given a $200,000 aftertax dividend payment and a 50% tax bracket. That means the company had at least $400,000 or more before taxes.
The aftertax 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?
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