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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%

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%

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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%
Transcribed Image Text: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%
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