- CFA Exams
- CFA Level I Exam
- Topic 4. Corporate Issuers
- Learning Module 16. Analysis of Dividends and Share Repurchases
- Subject 4. Factors Affecting Dividend Policy
CFA Practice Question
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.
Correct Answer: A
Australia has an imputation tax system.
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. |