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Basic Question 6 of 7
Australian shareholders in low tax brackets would prefer a ______ dividend payout.
B. lower
C. they don't care as their effective tax rate would be the same as those in higher tax brackets.
A. higher
B. lower
C. they don't care as their effective tax rate would be the same as those in higher tax brackets.
User Contributed Comments 1
| User | Comment |
|---|---|
| nicky333 | As with the split-rate-system, shareholders in lower tax brakets would prefer higher payouts, since they actually receive a tax credit for the difference between the corporate rate and their individual rate. |
You have a wonderful website and definitely should take some credit for your members' outstanding grades.
Colin Sampaleanu
Learning Outcome Statements
explain factors that affect dividend policy in practice;
calculate and interpret the effective tax rate on a given currency unit of corporate earnings under double taxation, dividend imputation, and split-rate tax systems;
CFA® 2025 Level II Curriculum, Volume 3, Module 16.