Assume that a company generates $1 of income and that 100% of after- tax company income is paid out as a dividend to a shareholder currently subject to a marginal tax rate of 42% and the company tax rate is 30%.What after- company- and- personal- tax income will the shareholder receive under
(i)a classical tax system
(ii)an imputation tax system?

Question

Assume that a company generates $1 of income and that 100% of after- tax company income is paid out as a dividend to a shareholder currently subject to a marginal tax rate of 42% and the company tax rate is 30%.What after- company- and- personal- tax income will the shareholder receive under 
(i)a classical tax system
(ii)an imputation tax system?

Quizplus · Accepted Answer

The Answer of Assume that a company generates $1 of income and that 100% of after- tax company income is paid out as a dividend to a shareholder currently subject to a marginal tax rate of 42% and the company tax rate is 30%.What after- company- and- personal- tax income will the shareholder receive under 
(i)a classical tax system
(ii)an imputation tax system?

Assume That a Company Generates $1 of Income and That