Assume that Provident Health System, a for-profit hospital, has $1 million in taxable income for… 1 answer below »

Assume that Provident Health System, a for-profit hospital, has $1 million in taxable income for 2007, and its tax rate is 30 percent.

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a. Given this information, what is the firm’s net income? (Hint: net income is what remains after taxes have been paid.)

b. Suppose the hospital pays out $300,000 in dividends. A stockholder receives $10,000. If the stockholder’s tax rate on dividends is 15 percent, what is the after-tax dividend?