You are a British investor who bought 500 shares of Acumen Conservative Portfolio fund a year ago
Question:
You are a British investor who bought 500 shares of Acumen Conservative Portfolio fund a year ago for £94.50 (Pound sterling). During the year, you received £3.00 in dividends per share, one-third of which was from dividends from the stocks the fund held and the remaining two-thirds from interest earned on bonds in the fund portfolio. Since income from ordinary dividends is currently taxed more favorably in the UK than interest on cash savings or fixed interest, the effective rate for dividends results in 10%. Assuming you are taxed at the basic rate of 20%, how much will you owe in taxes to the British government this year?
Step by Step Answer:
Income Tax Rate 20 Optimal Period to Sell 15 years Interest Rate on Bonds 8 Dividends per Share 300...View the full answer
Fundamentals Of Investing
ISBN: 9780135175217
14th Edition
Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk
Related Video
Stocks (also known as equities) are securities that represent ownership in a company. They are issued by companies to raise capital, and when an individual buys stocks, they become a shareholder in that company. Investing in stocks can be a way for individuals to potentially earn a return on their investment through dividends and capital appreciation. However, investing in stocks also carries a level of risk, as the value of the stock can fluctuate based on various factors such as the financial performance of the company and general market conditions. For companies, issuing stocks can be a way to raise funds for growth and expansion. When a company goes public by issuing an initial public offering (IPO), it can raise significant capital by selling ownership stakes to the public. Companies can also issue additional stock offerings to raise additional capital as needed.
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