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Marginal Dividend Tax (formula)

February 25, 2017

Pw – Pd = D * [(1 – Td)/(1 – Tcg)]

Pw = Stock price prior to dividend and eligible for dividend

Pd = Stock price after dividend

D = amount of dividend

Tcg = marginal capital gains tax

Td = marginal dividend tax

Solve for missing variable, usually Td.

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