Superannuation fund

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Assume instead that the superannuation fund decides to sell its shares under the off-market buyback, tendering its shares at the maximum of a 14% discount to the current market price of $5.60. Assume other shareholders adopt the same policy and the buyback price is set at a 14% discount to $5.60 or approximately $4.82. What are the after-tax proceeds to the fund if the fund purchased the share five years ago at a price of $3.80 and the dividend component of the buyback price is set at $2.90? In this scenario, the capital component is the sale price of $4.82 less the dividend component of $2.90 or $1.92. However, for capital gains tax purposes, the deemed capital proceeds from the sale are $5.60 less the dividend component of $2.90 or $2.70.1 Show all working.

Reference no: EM133227661

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