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Brandon invests $100,000 in a stock paying a 6% annual dividend. Assume Brandon's ordinary MTR is 30% percent, and his preferential (LTCG) tax rate is
Brandon invests $100,000 in a stock paying a 6% annual dividend. Assume Brandon's ordinary MTR is 30% percent, and his preferential (LTCG) tax rate is 18% percent. If Brandon reinvests the annual dividend that he receives net of any taxes owed on the dividend, how much will his investment be worth in 6 years? Assume the dividends are qualified dividends. Round your answer to the nearest whole number. 133,398 margin of error +/2 To calculate the after-tax value of Brandon's investment, multiply his initial investment $100,000 times (1+R(1tcg))n where R is Brandon's pre-tax rate of return, tcg is his preferential tax rate, and n is. his investment horizon. Example: if 1=6 percent and 2=5 years, then answer =$127,143 if 1=7 percent and 2=6 years, then answer =$139,777
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