Johnson & Bradley, Inc. invested $10,000 in 200 shares of ABC stock 18 months ago, and just sold all of them for $12,500. If it is subject to a tax rate of 21%, what is the tax on this investment income? 1 2 $425 3 4 5 6 7 $375 8 $475 $525 $575 $625 $675 None of the above

Johnson & Bradley, Inc. invested $10,000 in 200 shares of ABC stock 18 months ago, and just sold all of them for $12,500. If it is subject to a tax rate of 21%, what is the tax on this investment income? 1 2 $425 3 4 5 6 7 $375 8 $475 $525 $575 $625 $675 None of the above

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

Problem 1PS

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Question

Johnson & Bradley, Inc. invested $10,000 in 200 shares of ABC stock 18 months ago, and just
sold all of them for $12,500. If it is subject to a tax rate of 21%, what is the tax on this
investment income?
2 $425
(m)
3
(U7)
$375
8
$475
$525
$575
$625
$675
None of the above

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(Corporate income tax) The Robbins Corporation is an oil wholesaler. The firm's sales last year were $1.01 million, with the cost of goods sold equal to $590,000. The firm paid interest of $211,250 and its cash operating expenses were $104,000. Also, the firm received $45,000 in dividend income from a firm in which the firm owned 22% of the shares, while paying only $11,000 in dividends to its stockholders. Depreciation expense was $48,000. Use the corporate tax rates shown in the popup window, , to compute the firm's tax liability. What are the firm's average and marginal tax rates? ☑ The Robbins Corporation's tax liability for the year is $ (Round to the nearest dollar.) Data table Taxable Income Marginal Tax Rate $0-$50,000 15% $50,001 - $75,000 25% $75,001-$100,000 34% $100,001 - $335,000 39% $335,001-$10,000,000 34% $10,000,001 - $15,000,000 35% $15,000,001-$18,333,333 38% Over $18,333,333 35% (Click on the icon in order to copy its contents into a spreadsheet.)
Griffey Communications recently realized $90,000 in operating income. The company had interest income of $35,000 and realized $70,000 in dividend income. The company’s interest expense was $60,000. Its corporate tax rate is 25%. Griffey is a small company, so it is not subject to the interest expense deduction limitation. Assume a 50% dividend exclusion for taxes on dividends
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Ahmad Bought A Share Ten Months Ago For $25 A Share, Got A $3.5 Dividend Per Share Last Month, And Sold The Stock Today For $21.5 Per Share. Ahmad Falls In A Marginal Tax Bracket Of 30%. The Tax Rate On Both Capital Gains For Shares Held More Than One Year And Dividend Income Is 15%. What Is Ahmad's After-Tax HPR? 13.2% 11.0% 0.00% 16.7%

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