You live in British Columbia and your marginal federal tax rate is 22 , your marginal provincial tax rate is 11 9 , the dividend gross up factor is 125 , the federal dividend tax credit is 13 33 of grossed up dividends, and the provincial dividend tax credit is 6 6 of grossed up dividends If you bo...

Beforetax rate of return Aftertax dividend Grossed ...

You live in British Columbia and your marginal federal tax rate is 22 %, your marginal provincial

Question:

You live in British Columbia and your marginal federal tax rate is 22 %, your marginal provincial tax rate is 11.9%, the gross-up factor is 125%, the federal tax credit is 13.33% of grossed-up dividends, and the provincial tax credit is 6.6% of grossed-up dividends. If you bought shares of Mighty Mixer for $50, received dividends of $2, and sold the shares for $53 one year after you bought them, what are your before - and after-tax rates of return?
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...