Castor & Pollux Limited is an Australian firm whose shares trade on the ASX. The firm earn part of itsdomestically income in Australia and and part of its income overseas, where it is required to pay tax to theforeign governments where it operates. Currently, the Australian corporate tax rate is 25% and theMedicare levy is 2%. Castor & Pollux provides dividend imputation to Australian-resident shareholdersfrom its Australian tax paid.Assume that Castor & Pollux pays a 85 % partly-franked dividend of $14.32 thousand to an Australianshareholder who currently has a taxable income of $250 thousand before dividends and a marginal taxrate of 32.5% and is NOT exempted from paying Medicare levy. Compute the franking credits this investorwould receive from the partly-franked dividend received.O a. $4057.33O b. $2148.00c. $3109.83d.$84197.24e.$83779.87O f. $2282.85g. $1915.30

The franking credit refers to the tax credit provided to the investors or the shareholders on the…

Answered: Castor & Pollux Limited is an…

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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