Expected Future Reappearance of Higher Tax Rates
How might the expected future reappearance of higher tax rates on individuals receiving dividends affect corporate dividend payout policies?
The board of directors of Espinoza Industries, Inc., on October 4 of the current year, declared a quarterly dividend of $0.46 per share payable to all holders of record on Friday, October 30. They set a payment date of November 19. Rob and Kate Heckman, who purchased 500 shares of Espinoza’s common stock on Thursday, October 15, wish to determine whether they will receive the recently declared dividend and, if so, when and how much they would net after taxes from the dividend given that the dividends would be subject to a 15% federal income tax. Get Finance homework help today