Question: Need help with this Homework: Payout Policy Assignment 0 Saved 3 The expected pretax return on three stocks is divided between dividends and capital gains
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Homework: Payout Policy Assignment 0 Saved 3 The expected pretax return on three stocks is divided between dividends and capital gains in the following way: Expected Expected 5 Stock Dividend Capital Gain palms A $6 $10 B 5 5 c 19 e l eBElook Required: a. If each stock is priced at $180, what are the expected net percentage returns on each stock to (i) a pension fund that does not payr taxes, (ii) a corporation paying tax at 21% [the effective tax rate on dividends received by corporations is 6.3%}, and (iii) an individual Him with an effective tax rate of 15% on dividends and 10% on capital gains? b. Suppose that investors pay 50%tax on dividends and 20% tax on capital gains, If stocks are priced to yield an aftertax return of 8%, _ what would A, B, and C each sell for? Assume the expected dividend is a level perpetuity. E! Print Complete this question by entering your answers in the Elm below. Rqu Rqu If each stock is priced at $180, what are the expected net percentage returns on each stock to (i) a pension fund that does not pay taxes, (ii) a corporation paying tax at 21% (the effective tax rate on dividends received by corporations is 6.3%], and (iii) an individual with an effective tax rate of 15% on dividends and 10% on capital gains? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Show less; Homework: Payout Policy Assignment 0 Saved 3 The expected pretax return on three stocks is divided between dividends and capital gains in the following way: Expected Expected 6 Stock Dividend Capital Gain palm A $0 $10 B 5 5 c 10 o | egg\" Required: a. If each stock is priced at $180, what are the expected net percentage returns on each stock to (i) a pension fund that does not pay taxes, (ii) a corporation paying tax at 21% [the effective tax rate on dividends received by corporations is 6.3%}, and [iii] an individual Him with an effective tax rate of15% on dividends and 10% on capital gains? b. Suppose that investors pay 50% tax on dividends and 20% tax on capital gains. If stocks are priced to yield an aftertax return of 8%, _ what would A, B, and C each sell for? Assume the expected dividend is a level perpetuity. E! Prim Complete this question by entering your answers in the mbs below. 9.qu Suppose that investors pay 50% tax on dividends and 20% tax on capital gains. If stocks are priced to yield an aftertax return of 5%, what would A, B, and C each sell for? Assume the expected dividend is a level perpetuity. (Do not round intermediate calculations. Round your answers to 2 decimal places.) m m A _ B _ c
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