7A Suppose the capital-gain tax rate is 22%, and the dividend tax rate is 35%....
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7A Suppose the capital-gain tax rate is 22%, and the dividend tax rate is 35%. The share price of Kitty Limited is currently at $10. Assume you have 100 shares of Kitty Limited.
Case 1: Kitty Limited pay $2 dividend per share in one year, and the ex-dividend price would be $10.
Case 2: Kitty Limited does not pay any dividend, and the share price is $x in one year.
Calculate the effective dividend tax rate.
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