Question: The expected pretax return on three stocks is divided between dividends and capital gains in the following way StockExpected DividendExpectedCapital Gain A$0$10 B55 C 100

The expected pretax return on three stocks is divided between dividends and capital gains in the following way

StockExpected DividendExpectedCapital Gain

A$0$10

B55

C 100

1). Suppose that investors pay 40% tax on dividends and 10% tax on capital gains. If stocks are priced to yield an after-tax return of 10%, what would A, B, and C each sell for? Assume the expected dividend is a level perpetuity

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