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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. |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
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.