Consider three investors who need to partially liquidate investments to raise cash. In this case, all investments

Question:

Consider three investors who need to partially liquidate investments to raise cash. In this case, all investments have been held for 3 or more years. Investor A waited for a $1,500 qualified dividend distribution from her mutual fund, and Investor B received $1,500 in interest income from a certificate of deposit. However, because investor C could not wait for a distribution, he decided to sell $1,500 of appreciated stock shares. Assuming no commissions, no sales charges, and no state income tax and a 25 percent federal marginal tax bracket, which investment will provide the greatest after-tax amount?

Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most... 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...

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