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After reading this chapter, it isn't surprising that you're becoming an investment wizard. With your newfound expertise, you purchase 100 shares of KSU Corporation for

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After reading this chapter, it isn't surprising that you're becoming an investment wizard. With your newfound expertise, you purchase 100 shares of KSU Corporation for $33.15 per share. Assume the price goes up to $38.96 per share over the next 12 months and you receive a difidend $0.52 per share. What would be your total return on your KSU Corporation investment? Assuming you continue to hold the stock, calculate your after-tax return. How is your realized after-tax return different if you sell the stock? In both cases assume 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. Your total rate of return on your KSU Corporation investment is \%. (Round to two decimal places.) Assuming you continue to hold the stock, your after-tax rate of return is \%. (Round to two decimal places.) Your realized after-tax rate of return if you sell the stock is \%. (Round to two decimal places.)

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