ValiantCorp is a corporation that earned $3 per share before it paid any taxes. ValiantCorp retained $1 of after tax earnings for reinvestment, and distributed what remained in dividend payments. If the corporate tax rate was 30% and dividend earnings were taxed at 12.5%, what was the value of the dividend earnings received after tax by a holder of 100 000 shares of ValiantCorp?

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ValiantCorp's after-tax earnings per share are $2.10 ($3 - 30% of $3). They retained $1, leaving $1.10 for dividends. After a 12.5% tax on dividends, the net dividend per share is $0.9625. For 100,000 shares, this totals $96,250.

ValiantCorp Is a Corporation That Earned $3 Per Share Before