part c and d

Suppose that there are just three types of investors with the following tax rates: Dividends Capital gains Individuals 45% 17 Corporations 15% 7 Institutions 0% 0 Individuals invest a total of $80.2 billion in stock and corporations invest $10.24 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 Payout $ 7 17 Medium Payout $.7 7 High Payout $ 34 0 These payoffs are expected to persist in perpetuity. The low-payout stocks have a total market value of $100.2 billion, the medium-payout stocks have a value of $50.2 billion, and the high-payout stocks have a value of $120.2 billion. a. Who are the marginal investors that determine the prices of the stocks? O Institutions Individuals O Corporations b. Suppose that this marginal group of investors requires an after-tax return of 11%. What are the prices of the low-, medium-, and high- payout stocks? (Do not round intermediate calculations. Round your answers to 2 decimal places.) S 218.18 Price of low-payout stock Price of medium-payout stock Price of high-payout stock $ 12727 309.09 $ c. Calculate the after-tax returns of the three types of stock for each investor group (Do not round intermediate calculations. Round your answers to 2 decimal places.) Individuals Institutions 11% Corporations % % Low-payout stock Medium-payout stock High-payout stock 11% % % 11% % d. What are the dollar amounts of the three types of stock held by each investor group? (Leave no cells blank - be certain to enter "O" wherever required. Round your answers to 2 decimal places.) Institutions Individuals Corporations $ Low-payout stock Medium-payout stock High-payout stock $ $ $ Suppose that there are just three types of investors with the following tax rates: Dividends Capital gains Individuals 45% 17 Corporations 15% 7 Institutions 0% 0 Individuals invest a total of $80.2 billion in stock and corporations invest $10.24 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 Payout $ 7 17 Medium Payout $.7 7 High Payout $ 34 0 These payoffs are expected to persist in perpetuity. The low-payout stocks have a total market value of $100.2 billion, the medium-payout stocks have a value of $50.2 billion, and the high-payout stocks have a value of $120.2 billion. a. Who are the marginal investors that determine the prices of the stocks? O Institutions Individuals O Corporations b. Suppose that this marginal group of investors requires an after-tax return of 11%. What are the prices of the low-, medium-, and high- payout stocks? (Do not round intermediate calculations. Round your answers to 2 decimal places.) S 218.18 Price of low-payout stock Price of medium-payout stock Price of high-payout stock $ 12727 309.09 $ c. Calculate the after-tax returns of the three types of stock for each investor group (Do not round intermediate calculations. Round your answers to 2 decimal places.) Individuals Institutions 11% Corporations % % Low-payout stock Medium-payout stock High-payout stock 11% % % 11% % d. What are the dollar amounts of the three types of stock held by each investor group? (Leave no cells blank - be certain to enter "O" wherever required. Round your answers to 2 decimal places.) Institutions Individuals Corporations $ Low-payout stock Medium-payout stock High-payout stock $ $ $