Which of the following is (are) true about the dividend tax imputation system in New Zealand? Choose all correct answer(s). O The dividend tax imputation system is very similar to that used in the U.S. O Dividends are essentially still taxed at the company's tax rate (28%). If we account for personal taxes, the tax advantage of debt relative to equity for New Zealand companies increases; this is why New Zealand companies prefer debt to equity as a source for long-term financing. If the dividend is fully imputed, the effective tax rate on dividend for individual shareholders in New Zealand are their personal marginal tax rates. If the shareholder received $1,000 imputation credit, but he needs to pay $5,000 tax on income other than dividend income, he/she only needs to pay $4,000 to the IRD.

Which of the following is (are) true about the dividend tax imputation system in New Zealand? Choose all correct answer(s). O The dividend tax imputation system is very similar to that used in the U.S. O Dividends are essentially still taxed at the company's tax rate (28%). If we account for personal taxes, the tax advantage of debt relative to equity for New Zealand companies increases; this is why New Zealand companies prefer debt to equity as a source for long-term financing. If the dividend is fully imputed, the effective tax rate on dividend for individual shareholders in New Zealand are their personal marginal tax rates. If the shareholder received $1,000 imputation credit, but he needs to pay $5,000 tax on income other than dividend income, he/she only needs to pay $4,000 to the IRD.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter15: Distributions To Shareholders: Dividends And Repurchases

Section: Chapter Questions

Problem 2Q: How would each of the following changes tend to affect aggregate payout ratios (that is, the average...

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