Amanda would like to organize bal as either an llc (taxed as a sole proprietorship) or a c corporation. in either form, the entity is expected to generate an 8 percent annual before-tax return on a $500,000 investment. amanda’s marginal income tax rate is 37 percent and her tax rate on dividends and capital gains is 23.8 percent (including the 3.8 percent net investment income tax). if amanda organizes bal as an llc, she will be required to pay an additional 2.9 percent for self-employment tax and an additional 0.9 percent for the additional medicare tax. also, she is eligible to claim a full deduction for qualified business income on bal’s income. assume that bal will distribute half of its after-tax earnings every year as a dividend if it is formed as a c corporation.
what is the overall tax rate on bal’s income in the first year if bal is organized as an llc or as a c corporation?

For example, the upper right cell shows that if expresso advertises and beantown doesn't advertise, expresso will make a profit of $15 million, and beantown will make a profit of $2 million. assume this is a simultaneous game and that expresso and beantown are both profit-maximizing firms. if expresso decides to advertise, it will earn a profit of $ million if beantown advertises and a profit of $ million if beantown does not advertise. if expresso decides not to advertise, it will earn a profit of $ million if beantown advertises and a profit of $ million if beantown does not advertise. if beantown advertises, expresso makes a higher profit if it chooses . if beantown doesn't advertise, expresso makes a higher profit if it chooses . suppose that both firms start off not advertising. if the firms act independently, what strategies will they end up choosing? expresso will choose to advertise and beantown will choose not to advertise. expresso will choose not to advertise and beantown will choose to advertise. both firms will choose to advertise. both firms will choose not to advertise.