Canadian Securities Course (CSC) Practice Exam · Question
A Canadian resident investor receives an eligible dividend of $1,000 from a Canadian corporation. Assume a gross-up rate of 38% and a federal dividend tax credit rate of 15% of the grossed-up dividend. What is the dividend tax credit amount?
The grossed-up dividend is $1,000 * (1 + 0.38) = $1,380. The dividend tax credit is 15% of the grossed-up dividend, so 0.15 * $1,380 = $207.00.
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Question: A Canadian resident investor receives an eligible dividend of $1,000 from a Canadian corporation. Assume a gross-up rate of 38% and a federal dividend tax credit rate of 15% of the grossed-up dividend. What is the dividend tax credit amount?
Answer options:
- CAD 195.00
- CAD 150.00 ✅ CAD 207.00
- CAD 380.00
Correct answer: CAD 207.00
Explanation: The grossed-up dividend is $1,000 * (1 + 0.38) = $1,380. The dividend tax credit is 15% of the grossed-up dividend, so 0.15 * $1,380 = $207.00.
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