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17 February, 20:27

2. You are a shareholder in an S corporation. The corporation earns $2.07 per share before taxes. As a pass through entity, you will receive $2.07 for each share that you own. Your marginal tax rate is 20%. How much per share is left for you after all taxes are paid

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  1. 17 February, 22:09
    0
    1.66

    Explanation:

    From the question above, S corporation earns $2.07 per share before taxes are paid.

    $2.07 is received for each share

    The marginal tax rate is 20%

    = 20/100

    = 0.2

    Therefore, the amount of shares that is left after payment of taxes can be calculated as follows

    Amount of shares left = Price per share - (Price per share*tax rate)

    = $2.07 - ($2.07*0.2)

    = $2.07-0.414

    = 1.66

    Hence the amount of shares left after taxes have been paid is 1.66
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