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Consider Toews, an unlevered firm with assets valued at approximately $1 billion. Toews has a current stock price of $10 per share, and also has

Consider Toews, an unlevered firm with assets valued at approximately $1 billion. Toews has a current stock price of $10 per share, and also has a policy of not paying dividends. Next consider Jones, with 500 shares of Toews purchased 2 years ago at $13 per share. Jones would like to take some her investment in Toews outside the firm and wishes to create her own $750 dividend. If the capital gains rate is 20%, how much of the homemade dividend of $750 does Jones get to keep?

a.

$700

b.

$500

c.

$150

d.

$750

e.

$600

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