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What is the amount of additional tax paid

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A firm in Australia earns a pretax profit of $A10 per share. Suppose that it pays a corporate tax of $3 per share (30 percent tax rate) in taxes. The firm pays the remaining $A7 in dividends to a shareholder in the 40 percent marginal tax bracket. What is the amount of additional tax paid by the shareholder under an imputation tax system?

Reference no: EM132611639

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