For Valuation Purposes, the Calculation of the Equity Cost of Capital

For valuation purposes, the calculation of the equity cost of capital under an imputation system should be reduced by a factor representing, in broad terms

A) the proportion of taxes collected from the firm that will be included in the taxable income in the hands of the shareholders.
B) the proportion of taxes collected from the firm that will be rebated against the personal tax in the hands of shareholders.
C) the franking credits available to shareholders of the firm, weighted against the likelihood that the firm will pay a franked dividend to shareholders.
D) the proportion of taxes paid by individual shareholders that the firm will compensate through the payment of franking credits.