How much is left for after all taxes are paid

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You are a shareholder in an Australian corporation. The corporation earns $2 per share before taxes. Once it has paid taxes, it will distribute the rest of its earnings to you as a dividend. The corporate tax rate is 40% and you pay 34.5 cents per dollar earned.

Problem 1: How much is left for you after all taxes are paid/refunded?

Problem 2: Repeat (1) if the corporate tax rate was 20%. Before you do the calculation, what is your expectation?

Problem 3: As an Australian resident investor would you favour lower company or personal tax rates? What if you were a non-resident investor?

Reference no: EM132959296

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