- A franked dividend is paid with a tax credit attached and is designed to eliminate the issue of double taxation of dividends for investors.
- The shareholder submits the dividend income plus the franking credit as income but will only be taxed on the dividend portion.
- Franked dividends can be fully franked or partially franked.
- Franked dividends help to create more stable and competitive markets by lowering the tax burden on dividends.
Source: Investopedia.com