Hi all,

I know franking credits have been covered before, but I couldn't find an answer to my specific question.

I understand that the formula to calculate franking credits is:

Franking Credits = Dividend * (30/70) * Franking Percentage

I have spent the last few hours trying to figure out how the 30/70 is derived, but can't find a simple, easy to understand answer.

I'm wondering if anyone can give me a simple explanation as to why we multiply by 30/70?

Thanks very much.

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