Capital Structure problem?

Question

Mr Joe owns 80% of a firm's share and his personal tax rate is 50%, the corporate tax rate is 36%. If the company earns $250000 in pretax profits, what is the effective tax rate for Mr Joe given that the company has 50cent per share dividend and there are 150000 shares outstanding?

Answer 1

What country are we talking about? If it's the US, Mr. Joe's effective tax rate would be 15% as that is the tax rate for Qualified Dividends. If it's not qualified dividends, then Mr. Joe's effective tax rate is still 50%.