Suppose Tetra Finishing Company (TFC) makes a profit of $3 per share and decides to distribute it all to shareholders as a 50% partially franked dividend of $2.471 per share. Corporate tax rate is 30%.

If you hold 1000 shares in TFC and your income tax rate is 15% what is the total amount of tax you will pay to the government, or will be paid back to you? Choose the closest answer:

You will pay $529 to the government in taxes

The government will pay $529 to you

You will pay $79 to the government in taxes

The government will pay $79 to you

You do not owe anything in taxes, and nothing is owed to you

You will pay $2471 to the government in taxes