Franking Ltd has a before tax profit of $100,000. The after-tax profit will be distributed to you, as the sole shareholder, as a dividend. Your marginal tax rate is 18% and the company tax rate is 30%. What amount of tax is payable (or refundable to the shareholder) by the shareholder on this dividend and what is the shareholder's after-tax dividend under the imputation system?

Question 4 options:

	tax payable is $18,000 and the after-tax dividend is $52,000
	tax refundable is $12,000 and the after-tax dividend is $70,000.
	tax refundable is $12,000 and the after-tax dividend is $82,000.
	tax payable is $0 and the after-tax dividend is $70,000

Answer rating: 100% (QA)

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