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In a few years, you will be making $180,000 annual gross salary. Suppose your average income tax withheld each month = .268 of your monthly

  1. In a few years, you will be making $180,000 annual gross salary. Suppose your average income tax withheld each month = .268 of your monthly salary $180,000/12. In addition the withholding for FICA (social security and Medicare) is 7.65% of your monthly salary. Additionally, your 401(K) withholding is $350/month and other withholdings (extra life insurance, your part of health insurance, misc.) is $280/month. Complete the following table to find MONTHLY take home pay, and the % of your monthly salary you received each month.

Gross monthly salary =

Income tax withholding =

FICA withholding =

401(K) Contribution =

Other Withholdings =

Total Withholding =

Take Home Pay =

% of Monthly Salary received =

2. Suppose that investors expected a stock to pay the following dividends over the next 8 quarters. And its stock price 8 quarters from now is expected to equal $320. (Put those values in the timeline below). What price would the stock trade for today if the quarterly required return was 2%?

to t1 t2 t3 t4 t5 t6 t7 t8 (quarterly periods)

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