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Make sure to answer column C for pension, investor corporation, and individual. The expected pretax return on three stocks is divided between dividends and capital

Make sure to answer column C for pension, investor corporation, and individual.

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The expected pretax return on three stocks is divided between dividends and capital gains in the following way. Stock A B Expected Dividend $0 5 10 Expected Capital Gain $10 5 Required: a. If each stock is priced at $160, what are the expected net percentage returns on each stock to (1) a pension fund that does not pay taxes, (ii) a corporation paying tax at 21% (the effective tax rate on dividends received by corporations is 6.3%), and (ii) an individual with an effective tax rate of 15% on dividends and 10% on capital gains? b. Suppose that investors pay 50% tax on dividends and 20% tax on capital gains. If stocks are priced to yield an after-tax return of 8% what would A, B, and C each sell for? Assume the expected dividend is a level perpetuity. Complete this question by entering your answers in the tabs below. Req A ReqB If each stock is priced at $160, what are the expected net percentage returns on each stock to (i) a pension fund that does not pay taxes, (II) a corporation paying tax at 21% (the effective tax rate on dividends received by corporations is 6.3%), and (ill) an individual with an effective tax rate of 15% on dividends and 10% on capital gains? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Show lessA Stock Pension Investor Corporation Individual % % 96 B % 70

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