Underlying tax equals (dividend after tax) multiplied by which factor?

Underlying tax equals (dividend after tax) multiplied by which factor?

• A. Tax rate
• B. Net income
• C. Tax paid
• D. Tax base

Answer: (C)

Underlying tax is the amount of tax that has already been paid on the profits used to fund the dividend. Since the dividend after tax represents what remains after that tax has been taken, the tax component you’re looking for is the tax paid. In this framing, multiplying the dividend after tax by the factor of tax paid gives you the tax portion attached to that dividend. The tax rate would not directly yield the tax component from the after‑tax dividend by itself, and net income or tax base aren’t the appropriate indicators for this conversion.

Underlying tax is the amount of tax that has already been paid on the profits used to fund the dividend. Since the dividend after tax represents what remains after that tax has been taken, the tax component you’re looking for is the tax paid. In this framing, multiplying the dividend after tax by the factor of tax paid gives you the tax portion attached to that dividend. The tax rate would not directly yield the tax component from the after‑tax dividend by itself, and net income or tax base aren’t the appropriate indicators for this conversion.