Question: Each business generated $ 5 0 0 , 0 0 0 of taxable income and before - tax cash flow..A Corporation and B Company produce

Each business generated $500,000 of taxable income and before-tax cash flow..A Corporation and B Company produce a product, but C Company provides accounting services..A Corporation will distribute $200,000 of its after-tax income to Albert.. All three owners face a 37% marginal tax rate on ordinary income.Assume the tax rate applied to dividend income equals the top 20% net long-term capital gain rate plus the 3.8% net investment income tax rate. The corporate tax rate is 21% and 199A deduction is 20%.What will be the values of A Corporation, B Company, and C Company after three years? Assume that each business (a) required a $5,000,000 initial investment, (b) earns an annual 10% before-tax rate of return on the beginning-of-the-year investment, (c) can reinvest its after-tax cash flow back into the business, and (d) there is no unrealized appreciation of their assets.

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