Assuming no fixed costs are avoidable in the short run, a perfectly competitive firm's short-run supply curve is A. the portio
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<u>Solution and explanation:</u>
<u>Problem 19-50. </u>
b.
The redemption does not qualify for sale or exchange treatment:
If the redemption distribution does not qualify for sale or exchange treatment, the entire $150,000 will be taxed as a dividend at 15%
= $22,500
<u>Problem 19-48. </u>
B. Egret corporation will be able to claim a deduction for the amount of bonus (as an expense) which will reduce the company's tax liability. The total amount of tax savings from bonus payment would be $36,435
So, the net after-tax cost of the bonus for Egret Corporation would be $137,065
However, Egret corporation is not entitled to claim a deduction for dividends paid and as such there will be no tax savings
So, the net after-tax cost for the dividend would be $173,500.
Egret corporation would be best off by $36,435 if it paid salary to Kristen