a. Assume an investor can earn .12 before investor tax and .07248 after investor tax. The tax

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a. Assume an investor can earn .12 before investor tax and .07248 after investor tax. The tax rate on ordinary income is .396. If the corporation pays a $100 dividend, after 20 years the investor will have how much?

b. If the corporation retains the $100 and earns .12 per year for 20 years, the investor will have how much? Assume a .20 capital gains tax rate.

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