CFA Practice Question

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CFA Practice Question

Australian shareholders in low tax brackets would prefer a ______ dividend payout.

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.
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