Question
False Dividend = 25.5-10.5=15 After tax dividend = (15/0.7)*(1-0.2)=$17.14286 Deemed capital component = 26.8 - 15 = $11.8 Capital gain/loss =
False • Dividend = 25.5-10.5=15 • After tax dividend = (15/0.7)*(1-0.2)=$17.14286 • Deemed capital component = 26.8 - 15 = $11.8 • Capital gain/loss = 11.8 – 10 = 1.8 • After tax capital = 10.5 – 1.8*0.2 = 10.14 • Total proceeds after tax from the buyback = (17.14286+10.14)*100 = 2728.286
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The answer is FALSE The dividend amounts to 15 which is arrived ...
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Introduction to Accounting An Integrated Approach
Authors: Penne Ainsworth, Dan Deines
6th edition
78136601, 978-0078136603
