The Dividend Imputation System Has Encouraged Australian Companies to Adopt

question 20

Multiple Choice

The dividend imputation system has encouraged Australian companies to adopt higher dividend payout ratios because:

• A)tax on dividend income compared to capital gains is effectively lower for resident shareholders.
• B)tax on dividend income compared to capital gains is effectively higher for resident shareholders.
• C)tax on dividend income compared to capital gains is effectively no different for resident shareholders.
• D)resident companies now have higher after-tax profits from which to pay dividends.

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