Question Assuming an imputation tax system, show the values for A, B, C and D below Show all workings and attach a minus sign ( ) to the value if it is a cash outflow (4 marks) Marginal tax rate 45 19 Corporate level Net Profit Before Tax $3 $3 Corporate tax (30 ) $0 90 $0 90 Net Profit After Tax $2 10 $2 10 Shareholder level Cash dividends $2 10 $2 10 Gross up adjustment Grossed up dividends A A Personal Tax Franking credit Tax payable or refund B C Dividend after taxes D

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Question: Question Assuming an imputation tax system, show the values for A, B, C and D below. Show all workings and attach a minus sign (-)

Question

Assuming an imputation tax system, show the values for A, B, C and D below. Show all workings and attach a minus sign (-) to the value if it is a cash outflow. (4 marks)

Marginal tax rate	45%	19%
Corporate level
Net Profit Before Tax	$3	$3
Corporate tax (30%)	-$0.90	-$0.90
Net Profit After Tax	$2.10	$2.10
Shareholder level
Cash dividends	$2.10	$2.10
Gross-up adjustment
Grossed-up dividends	A	A
Personal Tax
Franking credit
Tax payable or refund	B	C
Dividend after taxes		D

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