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

Stock Expected Dividend Expected Capital Gain

A $ $0$ $ $10$

B $55$

C $100$

Required:

If each stock is priced at $$170,$ 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 $6\mathrm{.}3\%),$ and $($iii$)$ an individual with an effective tax rate of $15\%$ on dividends and $10\%$ on capital gains?

Suppose that investors pay $50\%$ tax on dividends and $20\%$ tax on capital gains. If stocks are priced to yield an after$-$tax return of $8\%,$ what would A$,$ B$,$ and C each sell for? Assume the expected dividend is a level perpetuity.