Share Prices of Companies Paying Franked Dividends

question 15

Multiple Choice

Share prices of companies paying franked dividends:

• A)should have increased since the introduction of dividend imputation because overseas residents would have sold this type of shares.
• B)should have increased since the introduction of dividend imputation because they have become more attractive to Australian investors.
• C)have not changed as a result of imputation.
• D)should have decreased since the introduction of dividend imputation because overseas residents are unable to use franking credits.

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Definitions:

Commission Rates

The percentage or fixed fee that a salesperson receives as compensation for their sales contributions.

Sales Total

The aggregate amount from all sales transactions within a given period.

Account Receivable

Money owed to a business by its customers for goods or services that have been delivered but not yet paid for.

Outstanding Debt

The total amount of borrowed money that has not yet been repaid by the borrower.