The shares of Microsoft were trading on NASDAQ on January 1 at $41 A Swedish investor purchased 100 shares of Microsoft at that price The Swedish kroner to dollar exchange rate then was $ Skr 9 4173 9 4188 One year later, the investor received a dividend of $2 per share, and the investor then sold ...

a Initial investment 41 100 4100 Gross dividend 2 100 200 Selling value 51 100 5100 Gross return in ...

The shares of Microsoft were trading on NASDAQ on January 1 at $41. A Swedish investor purchased

Question:

The shares of Microsoft were trading on NASDAQ on January 1 at $41. A Swedish investor purchased 100 shares of Microsoft at that price. The Swedish kroner to dollar then was $:Skr = 9.4173-9.4188. One year later, the investor received a of $2 per share, and the investor then sold the shares at a price of $51 per share. The at that time was $:Skr = 9.8710-9.8750. The withholding tax rate in the United States is 15 percent and there is a tax treaty between the United States and Sweden that allows the U.S. withholding tax to be used as a tax credit in Sweden. Suppose the Swedish investor is taxed at 50 percent on income and 15 percent on capita] gains, and ignore any commissions on purchase and sale of shares.
a. What is the gross rate of return on the investment, in dollars?
b. What is the gross rate of return on the investment, in kroners?
c. What is the rate of return on the investment, in kroners, net of taxes?
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...