- This topic has 5 replies, 3 voices, and was last updated 4 years ago by
.
Viewing 6 posts - 1 through 6 (of 6 total)
- Posts
My question here is after finding the increased dividend why do u divide it by 0.94?
I mistyped – it is 26% – 20%
Those are the two tax rates given in the question!!
whats the reason behind grossing up we can just do 10.422/(15m-0.9)..
Also if are grossing up.. why arent we doing full gross up that is 10.422/ 0.74 ( accpunting for 26% of the tax ?The question makes it clear that full credit is given for tax already paid.
Thy have already paid tax at 20% and therefore just have to pay the extra 6%.
Therefore for every $100 received in remittances they will only end up with a net $94. Or, putting it the other way round, for every increase in dividend capacity of $94 they need to have received $100 in remittances.
Viewing 6 posts - 1 through 6 (of 6 total)
- You must be logged in to reply to this topic.