Multiple Choice

QUESTION 12 An individual investor is subject to a 30 percent tax on dividends and 20 percent tax on capital gains, how much does the investor receive for $2/share in capital gains? O $1.4 O $1.5 O $1.6 QUESTION 13 An individual investor is subject to a 30 percent tax on dividends and 20 percent tax on capital gains, how much does the investor receive for $4/share in dividends? O $2.4 O $2.8 O $3.2 QUESTION 14 An individual investor is subject to a 30 percent tax on dividends and 20 percent tax on capital gains, what is the effective tax rate for the investor? O 10% O 13% O 14% QUESTION 15 All else equal, increasing leverage would ) a firm's share price due to the expected bankruptcy costs and are firm's share price due to the expected tax-shield. O raise, lower O lower, raise O lower, lower