alleryStart learning →Capital gains tax is 35% and dividend tax 15%. A 1 pound dividend implies a price drop of how much?
A0.85 pounds
B1.00 pounds
C1.31 pounds
D1.54 pounds
Answer & Solution
Correct answer: C. 1.31 pounds
After-tax dividend is 0.85, and 0.85 divided by (1 minus 0.35) gives a pre-tax drop of about 1.31 pounds.
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