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 = 11.8 10 = 1.8
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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Earnings Quality
Authors: Andrew P.C.
1st Edition
1521507724, 978-1521507728
