Ernst Gurtenbacher is coming in to see you about his investments. He is quite concerned about the amount of taxes that he pays, as his MTR is 41%, so he would like you to demonstrate to him how different types of investment incomes are taxed differently. Calculate the after-tax percentage return that each investment would produce.

• A preferred stock of a Canadian public company that will pay a 5.0% dividend over the next year
• A GIC that will pay 5.30% interest over the next year
• A Canadian public company common share that does not pay a dividend, but is expected to realize a 4.0% increase in market value over the next year
• A Canadian equity mutual fund that will pay a 1.5% dividend and is also expected to realize a 2.75% increase in its NAVPS over the next year

Question 9 options:

	Preferred stock = 5.005% GIC = 4.555% Common share =3.950% Mutual fund =3.885%
	Preferred stock =4.000% GIC = 3.964% Common share =3.775% Mutual fund =3.625%
	Preferred stock =3.402% GIC = 3.333% Common share =3.245% Mutual fund =3.100%
	Preferred stock = 3.207% GIC = 3.180% Common share = 3.149% Mutual fund = 3.127%
	Preferred stock = 3.175% GIC = 3.085% Common share =3.040% Mutual fund =3.015%