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Change to high-dividend-payout policy in world of taxes. Kevin currently owns 800 shares of Cylon, Inc. Cylon has a low-dividend-payout policy and this year will pay a $0.35 cash dividend on its shares, which are selling currently at $25.00. Kevin wants a high-dividend-payout policy of 7% of the stock price, or $1,400.00 after tax. Assume Kevin bought the stock at $19.00 per share and his tax rates are 25% on dividends and 15% on
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- An investor currently owns 6104 shares of LIWK Inc. LIWK Inc. has a high-dividend-payout policy and this year will pay $5 cash dividend on its shares selling currently at $69. Assume that an Investor: wants a low-dividend-payout policy. is now taxed at 15% on capital gains and 15% on dividend distributions. originally paid a price for these shares equal to their current price. If an investor need only $500, how many shares should be acquired by the Investor on ex-date in order to undo the dividend policy of LIWK Inc.?One year ago, you purchased stock ABC at price $10. During the year, the company paid $1 per share as taxable dividend. If you sell the stock at $13 today, what would be your realized after - tax return? Assume your marginal personal tax rate on income is 30% and the dividend tax credits of 12% can be applied. a. 29.65% b. 40% c. 33.7% d. 31.8%Required: Find the after-tax return to a corporation that buys a share of preferred stock at $40, sells it at year-end at $40, and receives a $4 year-end dividend. The firm is in the 21% tax bracket. (Round your answer to 2 decimal places.) After-tax rate of return %
- You buy a stock for $47 per share and sell it for $50 after holding it for slightly over a year and collecting a $4 per share dividend. If dividend incone is taxed at a 20% rate and capital gains are taxed at 25%, what is your after tax holding period return? (Write your answer in percentage and round it to 2 decimal places)Required: Find the after-tax return to a corporation that buys a share of preferred stock at $56, sells it at year-end at $56, and receives a $6 year-end dividend. The firm is in the 21% tax bracket. (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. 6.69 After tax rate of retamFind the after-tax return to a corporation that buys a share of preferred stock at $47, sells it at year-end at $47, and receives a $3 year-end dividend. The firm is in the 30% tax bracket. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
- 14. One year ago you purchased 100 shares of Dog Bites common stock for $25. You received dividends of $.70 per share and just sold the shares for $26.25 each. Your marginal personal tax rate is 40%, your dividend tax rate is 30%, and capital gains are taxed at 50% of your personal rate. a-1. What is your before-tax rate of return? (Round your answer to 2 decimal places.) a-2. What is your after-tax rate of return? (Round your answer to 2 decimal places.)22) You buy a stock for $30 per share and sell it for $33 after holding it for slightly over a year and collecting a $0.75 per share dividend. Your ordinary income tax rate is 28 percent and your capital gains tax rate is 20 percent. Your after-tax rate of return is to e asse (8 A) 12.50 percent. B) 9.80 percent. C) 8.75 percent. D) 8.00 percent. E) None of the above 22) riesYou bought 1,000 shares of Tund Corp. stock for $68.12 per share and sold it for $90.03 per share after a few years. How will your gain or loss be treated when you file your taxes? O As a capital gain taxed at the long-term tax rate O As a capital gain taxed at the current ordinary-income tax rate As a capital loss deducted from taxable income in the year that the loss is realized As a capital loss taxed at the long-term tax rate Suppose you want to invest $10,000. You have two options: (1) Invest in California municipal bonds with an expected rate of return of 9.00%, or (2) invest in J and K Corp.'s bonds with an expected rate of return of 12.15%. Assume that your decision is based on a tax perspective. If everything else is the same for both bonds, at what tax rate would you be indifferent between these two bonds? 25.93% 23.34% 22.04% O 32.41% According to a tax law established in 1969, taxpayers must pay the The applicable tax rate for S corporations is based on the: Stockholders'…
- You owned 100 shares of stock in BigCo, Inc., when it did a tax-free stock split (or “stock dividend"). Now you have 200 shares! You had paid $50 per share when you bought your original 100 shares. After the stock split, what is your tax basis in – your original 100 shares? your “new” 100 shares?You buy stock for $30 per share and sell it for $33 per share after holding it for slightly after a yer and collecting a $0.75 per share dividend. Youre ordinary income tax rate is 28% and your capital gains tax rate is 20%. Youre after tax return rate is? A. 8.00% B. 10.25% C. 12.5% D. 9.8% E.8.75%Find the after-tax return to a corporation that buys a share of preferred stock at $58, sells it at year-end at $58, and receives a $4 year-end dividend. The firm is in the 21% tax bracket. (Round your answer to 2 decimal places.)