After reading this chapter, it isn't surprising that you're becoming an investment wizard. With your newfound expertise, you purchase 100 shares of KSU Corporation for

$44.42 per share. Assume the price goes up to $53.29 per share over the next 12 months and you receive a qualified dividend of $.56

per share. What would be your total return on your KSU Corporation investment? Assuming you continue to hold the stock, calculate your after-tax return. How is your realized after-tax return different if you sell the stock? In both cases assume you are in the 25 percent federal marginal tax bracket and 15 percent long-term capital gains and qualified dividends tax bracket and there is no state income tax on investment income.

a) Your total rate of return on your KSU Corporation investment is: __% (Round to two decimal places.)

b) Assuming you continue to hold the stock, your after-tax rate of return is.: __%

(Round to two decimal places.)

c) Your realized after-tax rate of return if you sell the stock is: __%.

(Round to two decimal places.)