After reading this chapter, it isn 't surprising that you 're becoming an investment wizard With your newfound expertise, you purchase 100 shares of KSU Corporation for $37 per share Over the next 12 months assume the price goes up to $45 per share and you receive a qualified dividend of $0 50 per ...

Total return Sales Price Purchase Price Dividends Purchase Price Aftertax return Sa ...

After reading this chapter, it isn't surprising that you're becoming an investment wizard. With your newfound expertise,

Question:

After reading this chapter, it isn't surprising that you're becoming an investment wizard. With your newfound expertise, you purchase 100 shares of KSU for $37 per share. Over the next 12 months assume the price goes up to $45 per share and you receive a qualified of $0.50 per share. What would be your total return on your KSU investment? Assuming you continue to hold the stock, calculate your after-tax return. How is your realized after-tax return different if you sell the stock? In both cases, assume you are in the 25 percent federal marginal tax bracket and 15 percent long-term capital gains and qualified dividends tax bracket and there is no state income tax on investment income. Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...