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.

---

Definitions:

Product Life Cycle

A theory that describes the stages a product goes through from its introduction to the market to its decline and eventual withdrawal.

Maturity

The stage in a product's lifecycle where growth slows down, and sales stabilize or start to decline.

Service

A provision of intangible benefits or assistance, such as consulting, maintenance, or support, to satisfy consumer needs.

Product Cannibalization

The reduction in sales volume, revenue, or market share of one product as a result of the introduction of a new product by the same producer.