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Week2.docx - Week 2 Jiangqi Luo Chapter1 1 What is the most...

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Week 2 Jiangqi Luo ° Chapter1 ° 1. What is the most important difference between a corporation and all other organization forms? ° A corporation is a legal entity separate from its owners. This means ownership shares in the corporation can be freely traded . None of the other organizational forms share this characteristic. In addition, investors in a corporation can remain anonymous , and there is no limit on the number of owners a corporation can have. 6. 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 30% and you are on the lowest personal tax rate of 19%. How much is left for you after all taxes are paid/refunded? after tax is 2*(1-0.3) =$1.4 tax is $0.6 2*0.19 =$0.38 credit, 0.38-0.6 = -$0.22 The left is 1.4+0.22 =$1.62 ° 7. Repeat Problem 6 assuming the highest personal tax rate of 45%.
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