What is the amount of Colin's deductible interest expense if he received $600 in corporate dividends that are taxed at the 15% tax rate?

Question

Quizplus · Accepted Answer

The deductible interest expense is calculated by dividing the dividends received by (1 - tax rate). So, $600 / (1 - 0.15) = $600 / 0.85 = $705.88. However, this does not match any of the options, indicating a potential misunderstanding of the question or missing information. Assuming the question is about a different calculation, $11,800 is the closest option to a typical deductible amount in similar contexts.

What Is the Amount of Colin's Deductible Interest Expense If