Healthcare Finance

posted by .

2 A firm that owns the stock of another corporation does not have to pay taxes on the entire amount of dividends received. In general, only 30 percent of the dividends received by one corporation from another are taxable. The reason for this tax law feature is to mitigate the effect of triple taxation, which occurs when earnings are first taxed at the first firm, then its dividends paid to the second firm are taxed again, and then the dividends paid to stockholders by the second firm are taxed yet again. Assume that a firm with a 35 percent tax rate receives $100,000 in dividends from another corporation. What taxes must be paid on this dividend, and what is the after-tax amount of the dividend?

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. finance 2 questions

    9. When Patricia sells her General Motors common stock at the same time that Brian purchases the same amount of General Motor's stock, General Motors receives: A. The spread between the bid and ask of the transaction B. The dollar …
  2. investing 3-4

    4. Which of the following is the best conclusion, given only the following information: ZYX Corporation’s earnings after taxes have declined by 3.13% from the year earlier. During the past three months, ZYX purchased from investors …
  3. Finance

    A person is considering buying the stock of two home health companies that are similar in all respects except the proportion of earnings paid out in dividends. Both companies are expected to earn $6 per share in the coming year, but …
  4. Personal Finance

    Jo Bower owns 150 shares of Data General stock. She purchased the stock for $24 a share. She sold her stock for $30 a share. The commissions required to buy and sell her stock totaled $120. Assuming that she received no dividends during …
  5. personal finance

    Jo owns 150 shares of Delta General stock. She purchased the stock for $24 a share. She sold the stock for $30 per share. The commissions required to buy and sell her stock cost her $120. Assuming that she received no dividends (income) …
  6. Healthcare Finance

    A firm that owns the stock of another corporation does not have to pay taxes on the entire amount of dividends received. In general, only 30 percent of the dividends received by one corporation from another are taxable. The reason …
  7. Healthcare Finance

    2 A firm that owns the stock of another corporation does not have to pay taxes on the entire amount of dividends received. In general, only 30 percent of the dividends received by one corporation from another are taxable. The reason …
  8. Financing

    A person is considering buying the stock of two home health companies that are similar in all respects except for the proportion of earnings paid out as dividends. Both companies are expected to earn $6 per share in the coming year, …
  9. Finc 322

    Problem 7-17 Nonconstant Dividends [LO 1] Apocalyptica Corporation is expected to pay the following dividends over the next four years: $5.10, $16.10, $21.10, and $2.90. Afterwards, the company pledges to maintain a constant 5.25 percent …
  10. personal finance

    Which of the following is a true statement?

More Similar Questions