# The company tax rate is 30 cents in the dollar and a

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ReferencesMultiple ChoiceDiï¬ƒculty: HardLearning Objective: 6.03 Understand theimportance of taxation in the investmentdecision process.
The company tax rate is 30 cents in the dollar and a company earns an after-tax profit of \$400 000.If 80 per cent of the profit is paid as a fully franked dividend, what is the taxable income of aninvestor whose only source of income is a 10 per cent holding in the shares of this company?\$13 714\$40 000\$45 714\$32 000The company's total dividend payout will be \$400 000 Ã— 0.8 = \$320 000 so the investor's share is\$32 000. The imputation credit attached to the dividend will be \$(32 000 Ã— 0.3)/0.7 = \$13 714. Theinvestor's taxable income is equal to the dividend plus the imputation creditâ€”a total of \$45 714.
10.Award:0 out of 10.00 pointsWhich of the following statements about fundamental analysis and technical analysis is correct?
ReferencesMultiple ChoiceDiï¬ƒculty: MediumLearning Objective: 6.01 Consider therole of an investor in the share market,appreciate the wide range of investmentchoices that are available andunderstand risks associated withinvestments in shares of listedcorporations.
11.Award:0 out of 10.00 pointsIn October 2004, Arthur purchased 10 000 shares in XYZ Limited at \$4.50 each. In March 2007, hesells half of the shares at \$8.10 per share and on 30 June 2007 the closing price of XYZ shares was\$9.20. Arthur's marginal tax rate on income is 48.5 per cent. How much capital gains tax will he payon his investment in XYZ?\$8700\$2865\$4365\$9000The gain on the 5000 shares sold is 5000 Ã— \$(8.10 â€“ 4.50) = \$18 000. Since the shares were heldfor more than a year the gain is discounted by 50 per cent to \$9000 so the capital gains tax is\$9000 Ã— 0.485 = \$4365. Only the realised gains are taxed, so the shares still held can be ignored.
12.Award:0 out of 10.00 pointsReferencesMultiple ChoiceDiï¬ƒculty: HardLearning Objective: 6.03 Understand theimportance of taxation in the investmentdecision process.

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