Scrapping franking credits would trigger steep price falls of BHP, Telstra and Woolworths

Clime Investment Management

Clime Investment Management

Scrapping franking credits would trigger steep price falls of BHP, Telstra and Woolworths. Share prices of other widely held Australian companies which pay franked dividends, would slump by up to 30% if franking credits were removed, with no tax offset, seriously hurting investors and retirees. The Murray Inquiry into Australia's financial system has triggered fresh debate over whether Australia should scrap dividend imputations (franking credits). But there has been little focus on the impact removing them would have on the value of companies. Franking credits substantially increase the intrinsic value of Australian shares because the return on capital is increased by the franking credit. If imputation is changed and dividends became taxable then investors would be right to fear the consequences. Its abolition, with no offset, would make companies less valuable and trigger major share price corrections across the market. Read more: (VIEW LINK)


Clime Investment Management
Funds Management & Stock Research
Clime Investment Management

The Clime Group is a respected and independent Australian Financial Services Company, which seeks to deliver excellent service and strong risk-adjusted total returns, closely aligned with the objectives of our clients.

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.