Scenario You are an employee of Wolfpack Company, and you just received 1,000 shares of restricted stock that vest in 4 years at no cost. You plan on selling the stock as soon as it vests. Here are some relevant facts:  The current and expected ordinary income tax rate in 4 years is 37%  The current value of the stock is $15,000  The expected value of the stock in 4 years is $36,000  The discount rate (the rate at which you can borrow or invest money) is 7 percent. 

Calculations: 1. 

Calculate the after-tax cash flow of your stock sale in 4 years assuming you do nothing now and sell the stock as soon as it vests. Recall that the default treatment for restricted stock is that the value of the stock at the vesting date is taxable at ordinary income tax rates.

Answer rating: 100% (QA)

To calculate the aftertax cash flow of your stock sale in 4 years we need to consider the t... View the full answer