Prior to TD 2004/22, Pinder Ltd announces an off-market buyback to its shareholders at $15 per share. Of the $15, $10 was a fully franked dividend and the capital component was $5. The market price for Pinder Ltd is $20 per share. Susan owns one share in Pinder Ltd which she had bought 3 years ago at $10. Pinder Ltd’s tax rate is 26% and Susan’s personal tax rate is 36%. If Susan decides to participate in the buyback, what is her gain/loss relative to selling shares in the exchange at the market price of $20, based only on the information above? (round to the nearest two decimal places) a) None of the other answers. b) $-4.27 c) $-4.46 d) $-3.89 e) $-4.08 *explain in full detail

Prior to TD 2004/22, Pinder Ltd announces an off-market buyback to its shareholders at $15 per share. Of the $15, $10 was a fully franked dividend and the capital component was $5. The market price for Pinder Ltd is $20 per share. Susan owns one share in Pinder Ltd which she had bought 3 years ago at $10. Pinder Ltd’s tax rate is 26% and Susan’s personal tax rate is 36%. If Susan decides to participate in the buyback, what is her gain/loss relative to selling shares in the exchange at the market price of $20, based only on the information above? (round to the nearest two decimal places) a) None of the other answers. b) $-4.27 c) $-4.46 d) $-3.89 e) $-4.08 *explain in full detail

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter13: Comparative Forms Of Doing Business

Section: Chapter Questions

Problem 43P

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