For an accumulating ETF like the SPYL, it had an annual dividend yield of 1.39% recently.
Assume the rate of return is 8% and withholding tax is 15% for the purposes of this example.
Which of the below represents the correct way to calculate the rate of return percentage after the withholding tax:
1) 8% - 1.39% = 6.61% rate of return after the withholding tax
2) 100% (representing the entire 8% rate of return) - 1.39% = 98.61%
98.61% of 8% = 7.9833% rate of return after the withholding tax