Help Save & Ext Submit Check my work Suppose that there are just three types of investors with the following tax rates: Individuals Corporations Institution Dividends 501 100 0 Capital gains 10 40 0 Individuals invest a total of $81.3 billion in stock and corporations invest $11.56 billion. The remaining stock is held by the Institutions All three groups simply seek to maximize their after-tax income These investors can choose from three types of stock offering the following pretax payouts per share: Dividends Capital gains Low Post Medium Payout High Payout 6 96 $32 16 These payoffs are expected to persisten perpetuity. The low-payout stocks have a total market value of $101.3 billion, the medium payout stocks have a value of $51.3 billion, and the high payout stocks have a value of $121.3 billion a. Who are the marginal investors that determine the prices of the stocks? b. Suppose that this marginal group of investors requires an after tax return of 10%. What are the prices of the low, medium, and high- payout stocks? c. Calculate the after tax returns of the three types of stock for each investor group. d. What are the dollar amounts of the three types of stock held by each investor group? Complete this question by entering your answers in the tabs below