Samantha lives under an imputation tax system. Her income tax
rate is 30%, which applies to all of her income, including wages,
interest income and dividend income. Samantha owns 1000 shares of
Rio Inc. which has 3.2 billion shares outstanding and taxable
income of $1.8 billion (in the current year). Rio’s pays corporate
tax rate at 28% and its payout ratio in the past has been 60%. Rio
has just announced that it will maintain the past payout ratio and
all dividends (to be paid next month) will be fully franked. Given
this information, if Samantha had lived under a classical tax
system, which of the following is closest to the additional tax she
would have to pay as a Rio shareholder?
$72.90
$82.45
$66.15
$45.25
None of the other answers
Samantha lives under an imputation tax system. Her income tax rate is 30%, which applies to all of her income, including
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