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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. |
Your review questions and global ranking system were so helpful.
Lina
Learning Outcome Statements
compare stable dividend with constant dividend payout ratio, and calculate the dividend under each policy;
describe broad trends in corporate payout policies;
CFA® 2026 Level II Curriculum, Volume 3, Module 16.