An investor buys a stock today for $26,receives a dividend of $2 at the end of the year and then sells the stock for $30.If the dividend is taxed at 40% and the capital gain at 20%,what is his return after tax?

Name: An investor buys a stock today for $26,receives a dividend of $2 at the end of the year and then sells the stock for $30.If the dividend is taxed at 40% and the capital gain at 20%,what is his return after tax?
Brand: Quizplus
Rating: 4.9 (53 reviews)

Question

Quizplus · Accepted Answer

($2 + ($30 − $26) − (0.4 × $2) − (0.2 × $4)) / $26 =0.1692, or 16.92%

An Investor Buys a Stock Today for $26,receives a Dividend