Question
As an investor with a marginal federal tax rate of 29% and a provincial tax rate of 11.16%, you have decided to purchase 1,000 shares
As an investor with a marginal federal tax rate of 29% and a provincial tax
rate of 11.16%, you have decided to purchase 1,000 shares of ABC CORP. and hold them for 1 year. The current market price of a share ofABC is $ 30.00. An investment analyst has indicated that the shares are expected to be selling for $ 31.50 in 1 year's time and that ABC is expected to declare and pay a dividend of $ 2.00 per share for the coming year.
Required:
If you purchase the shares, what will be your expected total after-tax rate of return from
the investment and selling the shares after 1 year?
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Modern Portfolio Theory and Investment Analysis
Authors: Edwin Elton, Martin Gruber, Stephen Brown, William Goetzmann
9th edition
9781118805800, 1118469941, 1118805801, 978-1118469941
