If Jim invested $100,000 in an annual dividend-paying stock today with a 7 percent return, what investment time period will give Jim the greatest after-tax return?
A)1 year
B)5 years
C)10 years
D)20 years
E)All yield the same after-tax return.

Question

Quizplus · Accepted Answer

The after-tax return of a dividend-paying stock with a fixed annual return rate does not depend on the investment time period, assuming the tax rate and return rate remain constant over time.

If Jim Invested $100,000 in an Annual Dividend-Paying Stock Today