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Imputation tax system relative to a classical tax system

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A company earns $20 million in taxable income, pays a constant corporate tax rate of 30%, and adopts a 100% payout ratio policy. Assuming that equity holders have an average personal income tax rate of 45% and that they fully utilize their franking credits, how much greater will equity holders' total after-tax income be under an imputation tax system relative to a classical tax system?

Reference no: EM133004854

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