Singapore switched from the Imputation Tax System to the One Tier Corporate Tax System in 2003. Ignoring the 5-year tax credit grace period, answer the following:

1. Is dividend policy relevant under the imputation tax system? Which is better for shareholders: dividend payment or share repurchase?
2. Is dividend policy relevant under the One Tier Corporate Tax System? Which is better for shareholders: dividend payment or share repurchase?

Answer rating: 100% (QA)

Dividend Policy Relevance Yes the dividend policy is relevant under the Imputation Tax System1 This system eliminates the double taxation of cash payo... View the full answer