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Business, 15.07.2020 02:01 Jordandenzel

Kristen, the president and sole shareholder of Egret Corporation, has earned a salary bonus of $30,000 for the current year. Because of the lower tax rates on qualifying dividends, Kristen is considering substituting a dividend for the bonus. Assume that the tax rates are 24% for Kristen and 21% for Egret Corporation. 1. How much better off would Kristen be if she were paid a dividend rather than salary?2. How much better off would Egret Corporation be if it paid Kristen a salary rather than a dividend?3. If Egret Corporation pays Kristen a salary bonus of $40,000 instead of a $30,000 dividend, how would your answers to above change? 4. What should Kristen do?

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Kristen, the president and sole shareholder of Egret Corporation, has earned a salary bonus of $30,0...
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