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Assignment help 328

Outback Gold Ltd. pays dividends about every 6 months. The current dividend of $1.00 has just been announced. The dividend is fully franked at the corporate tax rate of 30%. The marginal investor has an income tax rate of 40% and a capital gains tax rate of 20%. Calculate the grossed up value of the dividend, the amount of income tax the investor has to pay and the expected price drop attributable to the dividend payment. Does this price drop happen when the dividend is announced, on the record date, the ex-dividend date, or the payment date?(I don’t understand the price drop part)


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