One year ago you purchased 100 shares of Dog Bites common stock for $25. You received dividends

Question:

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. What are your before - and after-tax rates of return? Your marginal personal tax rate is 40%, your dividend tax rate is 30%, and capital gains are taxed at 50% of your personal rate.
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
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...
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Fundamentals of Corporate Finance

ISBN: 978-1259024962

6th Canadian edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim

Question Posted: