Both Andy and Barry are New Zealand tax residents. Andy's personal marginal tax rate marginal tax rate is 33.0%. Andy has received a dividend cheque from Company ABC pa 1,506.07 New Zealand dollars. Barry has also received a dividend cheque from Compar of 807.06 New Zealand dollars. Company ABC's marginal corporate tax rate is 28% and imputed. Required: What would be the effective tax rate for Andy and Barry respectively for these dividend i blanks below. Note: ignore withholding tax; effective tax rate = (Gross dividend – shareholder's income
Both Andy and Barry are New Zealand tax residents. Andy's personal marginal tax rate marginal tax rate is 33.0%. Andy has received a dividend cheque from Company ABC pa 1,506.07 New Zealand dollars. Barry has also received a dividend cheque from Compar of 807.06 New Zealand dollars. Company ABC's marginal corporate tax rate is 28% and imputed. Required: What would be the effective tax rate for Andy and Barry respectively for these dividend i blanks below. Note: ignore withholding tax; effective tax rate = (Gross dividend – shareholder's income
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Both Andy and Barry are New Zealand tax residents. Andy's personal marginal tax rate is 10.5%. Barry's personal
marginal tax rate is 33.0%. Andy has received a dividend cheque from Company ABC paying a net dividend of
1,506.07 New Zealand dollars. Barry has also received a dividend cheque from Company ABC with a net dividend
of 807.06 New Zealand dollars. Company ABC's marginal corporate tax rate is 28% and their dividends are fully
imputed.
Required:
What would be the effective tax rate for Andy and Barry respectively for these dividend incomes? Please fill in the
blanks below.
Note: ignore withholding tax; effective tax rate = (Gross dividend – shareholder's income after all taxes)/gross
dividend
Andy's effective tax rate :
1.6 %
%3D
Barry's effective tax rate = 2.2 %
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