Question
After reading this chapter, it isn't surprising that you're becoming an investment wizard. With you newfound expertise, you purchase 100 shares of KSU Corporation for
After reading this chapter, it isn't surprising that you're becoming an investment wizard. With you 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 share. What would be your total return on your KSU Corporation investment? Assuming you continue to hold the stock, calculate the after-tax return. How is your realzed after-tax return different if you sell the stock? In both cases, aussme 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.
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