As a financial analyst at Credit Suisse, you are analyzing the after tax returns for your client. Suppose your client bought a share of stock of intel at $60, a share of stock Microsoft at $70, and a share of IBM at $80. A year later, after your client received a $3 dividend from Intel, $4 dividend from Microsoft, and $5 from IBM, he sold the stock Intel at $70 per share, sold Microsoft at $80, and sold IBM at 90. What are the expected after tax retums for your client if your client is (a) a church investment fund (tax-exempt status) (Sample answer: 10.55%) (b) a corporation paying tax at 21% (assume that corporations may exclude 70% of dividends received from domestic corporations in the computation of their taxable income) (Sample answer: 10.55%) (c) an individual paying tax at 21% on capital gains and dividend income at 35%? (d) a security dealer paying tax at 28% on both dividend income and capital gains? (Sample answer: 10.55%) (Sample answer: 10.55%)
As a financial analyst at Credit Suisse, you are analyzing the after tax returns for your client. Suppose your client bought a share of stock of intel at $60, a share of stock Microsoft at $70, and a share of IBM at $80. A year later, after your client received a $3 dividend from Intel, $4 dividend from Microsoft, and $5 from IBM, he sold the stock Intel at $70 per share, sold Microsoft at $80, and sold IBM at 90. What are the expected after tax retums for your client if your client is (a) a church investment fund (tax-exempt status) (Sample answer: 10.55%) (b) a corporation paying tax at 21% (assume that corporations may exclude 70% of dividends received from domestic corporations in the computation of their taxable income) (Sample answer: 10.55%) (c) an individual paying tax at 21% on capital gains and dividend income at 35%? (d) a security dealer paying tax at 28% on both dividend income and capital gains? (Sample answer: 10.55%) (Sample answer: 10.55%)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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