As a financial analyst at Deutsche Bank, you are analyzing the after tax returns for your client. Suppose your client bought a share of stock of AMD at $60, a share of stock Oracle at $70, and a share of IBM at $80. A year later, after your client received a $3 dividend from AMD, $4 dividend from Oracle, and $5 from IBM, he sold the stock AMD at $65 per share, sold Oracle at $75, and sold IBM at 80. What are the expected after tax returns for your client if your client is

(a) a church investment fund (tax-exempt status) (Sample answer: 10.55%)

(b) a corporation paying tax at 21% (remember that corporations may exclude 70% of dividends received from domestic corporations in the computation of their taxable income) (Sample answer: 10.55%)

(c) an individual paying tax at 21% on capital gains and dividend income at 35%? (Sample answer: 10.55%)

(d) a security dealer paying tax at 28% on both dividend income and capital gains? (Sample answer: 10.55%)