Normal
That's right. But there is an even simpler way of looking at it.At the higher tax you pocket 60% of the profits. At the lower tax rate you pocket 80%. So the ratio is 60%/80% or 0.75. So it basically means that your profit can shrink by the same factor and your NPAT will be the same.In the example above your starting profit was 8c. So it can fall to 0.75x8c = 6c for you to get the same NPAT at the lower tax rate. A 6c profit = 10c share price, as per your calculation.BTW my charge out fee is $260 per hour + GST, with minimum charge in 8 hr blocks. Invoice is on the way.
That's right. But there is an even simpler way of looking at it.
At the higher tax you pocket 60% of the profits. At the lower tax rate you pocket 80%. So the ratio is 60%/80% or 0.75. So it basically means that your profit can shrink by the same factor and your NPAT will be the same.
In the example above your starting profit was 8c. So it can fall to 0.75x8c = 6c for you to get the same NPAT at the lower tax rate. A 6c profit = 10c share price, as per your calculation.
BTW my charge out fee is $260 per hour + GST, with minimum charge in 8 hr blocks. Invoice is on the way.
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