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.