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A firm has a choice of distributing $10,000,000 as either dividends or as a repurchase. Suppose dividends are taxed at a 40% rate and capital

A firm has a choice of distributing $10,000,000 as either dividends or as a repurchase. Suppose dividends are taxed at a 40% rate and capital gains at a 20% rate. What total taxes would shareholders pay if there is a capital gains distribution?

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