The following table sets out the tax rates for Australian resident individuals for the financial year ended 30 June 2020.

Rachel’s income for the 2019-20 financial year is $178,000 excluding dividends and share transactions. She received a fully franked dividend of 35 cents per share on her holding of 10,000 shares in National Beds Ltd (NBL) and an unfranked dividend of 7 cents per share on her holding of 6000 shares in Millennial Bank Ltd (MBL). On 5 June 2020, she sold 5,000 shares in Big Bear Ltd (BBL) at $2.00 per share which were acquired on 10 June 2019 at $1.10 per share.

Note: You may type your responses to each part in the spaces provide below. Alternatively, you may upload your handwritten and scanned answers to each question part below. (Do not upload the answers to any other questions here as they will not be marked.)

Calculate the grossed-up franked dividend amount for Rachel. Show all calculations.

Calculate the unfranked dividend amount for Rachel. Show all calculations.

Calculate the taxable capital gain amount for Rachel. Show all calculations.

Write down in words what items you need to sum up to get the total taxable income for Rachel.

Calculate the tax payable on the total taxable income for Rachel if her total taxable income was $188,000. Show all calculations.

“For resident Australian taxpayers, it is probably true that the higher their marginal tax rate, the less likely they are to favor stocks that pay high franked dividends.” Is this statement true? Why or why not? Explain.