Companies options when it comes to Franking Credits

Do companies have the option to pay dividends in franked or unfranked forms?

A: Potentially yes (if they have the franking credits). They can choose to frank the dividend or leave it unfranked.


Remember, franking credits are absolutely of no value to the company – they are only of value to the shareholders. Franking credits represent the company tax paid to the Australian Taxation Office – for each dollar of tax they pay, the get 1 dollar of franking credits. Accordingly, if a company has the available franking credits, 99.99% of the time it will frank the dividend.

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