Use the table for the question(s) below.
Consider the following top federal tax rates in the United States:
Personal Tax Rates

-Assuming an average dividend payout ratio of 50%,the effective tax rate for equity holders was closest to:

Question

Use the table for the question(s) below.
Consider the following top federal tax rates in the United States:
Personal Tax Rates
 
-Assuming an average dividend payout ratio of 50%,the effective tax rate for equity holders was closest to:

Quizplus · Accepted Answer

C) The average personal tax rate on equity is (19.3% + 14.5%) / 2 = 16.9% So, the effective tax rate = 1 - (1 - τ_c)(1 - τ_e) = 1 - (1 - .15)(1 - .169) = .294

Use the Table for the Question(s) Below