You purchase a stock at the beginning of the year for $108. At the end of the year, the stock pays a dividend of $1.80 and you sell the stock for $117. Now suppose that dividends are taxed at 15 percent and long- term capital gains (over 11 months) are taxed at 30 percent, what is your aftertax return for the year?

You purchase a stock at the beginning of the year for $108. At the end of the year, the stock pays a dividend of $1.80 and you sell the stock for $117. Now suppose that dividends are taxed at 15 percent and long- term capital gains (over 11 months) are taxed at 30 percent, what is your aftertax return for the year?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter6: Accounting For Financial Management

Section: Chapter Questions

Problem 7MC: Cochran also has asked you to estimate Computrons EVA. She estimates that the after-tax cost of...

See similar textbooks

Similar questions

Need help
You just purchased a share of SPCC for $101.You expect to receive a dividend of $6 in one year. If you expect the price after the dividend is paid to be $115, what total return will you have earned over the year? What was your dividend yield? Your capital gain rate? _____________________%.(Round to two decimal places.)
You just purchased a share of SPCC for $101. You expect to receive a dividend of $7 in one year. If you expect the price after the dividend is paid to be $113, what total return will you have earned over the year? What was your dividend yield? Your capital gain rate?
You just purchased a share of SPCC for $105. You expect to receive a dividend of $3 in one year. If you expect the price after the dividend is paid to be $109, what total return will you have earned over the year? What was your dividend yield? Your capital gain rate? The total return you will have earned over the year is %. (Round to two decimal places.)
You just purchased a share of SPCC for $95. You expect to receive a dividend of $7 in one year. If you expect the price after the dividend is paid to be $115, what total return will you have earned over the year? What was your dividend yield? Your capital gain rate? The total return you will have earned over the year is _____%. (Round to two decimal places.) Your dividend yield will be ____%. (Round to two decimal places.) Your capital gain rate will be _____%. (Round to two decimal places.)
Best Corporation is expected to pay $.60 next year and $1.10 the following year and $1.25 each year thereafter. If the required return is .14, what is the priice of the stock? $7.40 $2.95 $8.24 $2.22
You purchase Griffin ltd at $46.00 per share intend to hold it for a year and hope to sell, it at $51. If year end dividends are expected to be $0.75 what is your expected return?
Gelo, an investor, receives a 15% total return by purchasing a stock for P40 and selling it after one year with a 10% capital gain. How much was received in dividend income during the year? A. P2.00 B. P2.20 C. P4.00 D. P6.00
$30 per share, holds the shares for 5 years, and sells them for $65. (Hint: Find the holding period return and divide by the number of years in the holding period.) The annualized rate of return is ☐ %. (Round to two decimal places.) What is his after-tax rate of return if he is in the 25 percent marginal tax bracket? The tax due is $ (Round to the nearescent.) The after-tax rate of return is ☐ %. (Round to two decimal places.)
You are considering acquiring a common share of Sahali Shopping Center Corporation that you would like to hold for 1 year. You expect to receive both $1.15 in dividends and $25 from the sale of the share at the end of the year. The maximum price you would pay for a share today is if you wanted to earn a 11% return.
You own $107,000 worth of Smart Money stock. One year from now, you will receive a dividend of $2.95 per share. You will receive a dividend of $3.10 two years from now. You will sell the stock for $72 per share three years from now. Dividends are taxed at the rate of 38 percent. Assume there is no capital gains tax. The required aftertax rate of return is 16 percent. How many shares of stock do you own? Give typing answer with explanation and conclusion
One year ago, you purchased a stock at a price of $28.75. The stock pays quarterly dividends of $.35 per share. Today, the stock is worth $31.25 per share. What is the total amount of your capital gains to date from this investment? (show detailed steps)