You Are a Shareholder in a Corporation Which Has Elected

Multiple Choice

You are a shareholder in a corporation which has elected subchapter S tax treatment. The corporation announces a profit of $6 per share, of which it retains $1 for reinvestment and distributes the rest as dividend payments. Given that the personal tax rate is 35%, how much tax must you pay per share?

A) $0
B) $2.10
C) $1.75
D) $2.52