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You purchased a stock at the end of the prior year at a price of $88. At the end of this year the stock pays
You purchased a stock at the end of the prior year at a price of $88. At the end of this year the stock pays a dividend of $2.50 and you sell the stock for $94. What is your return for the year? Now suppose that dividends are taxed at 15 percent and long-term capital gains (over 11 months) are taxed at 30 percent. What is your aftertax return for the year? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.) |
Pretax return | % |
Aftertax return | % |
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