Show me how to post my homework

Just do my homework!

Question
Submitted by Asma on Fri, 2012-05-04 13:58
due on Tue, 2012-05-08 13:54
answered 1 time(s)
Asma is willing to pay $40.00
Asma bought 50 out of 89 answered question(s)

Busi 530 Corporate Finance McGraw Hill Connect Home work 8

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 $28
B 14 14
C 28 0

a.
If each stock is priced at $100, what are the expected net returns on each stock to (i) a pension fund that does not pay taxes, (ii) a corporation paying tax at 35%, and (iii) an individual with an effective tax rate of 15% on dividends and 10% on capital gains? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Stock Pension Investor
Corporation Individual
A % % %
B % % %
C % % %

b.
Suppose that investors pay 50% tax on dividends and 20% tax on capital gains. If stocks are priced to yield an 10% return after tax, what would A, B, and C each sell for? Assume the expected dividend is a level perpetuity. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Stock P0
A $
B
C

Answer
Submitted by Asma on Fri, 2012-05-04 14:00
teacher rated 211 times
4.8673
purchased one time
price: $40.00

Answer rating (rated one time)

5

For Vivia Only

body preview (165 words)

The xxxxxxxx pretax xxxxxx on xxxxx xxxxxx is xxxxxxx xxxxxxx xxxxxxxxx and xxxxxxx xxxxx xx xxx xxxxxxxxx way:

Stock Expected
xxxxxxxxxxxxxxxxx
xxxxxxx xxxx
A xx $28
B 14 x xx
xx xx x

xx
xx each stock xx xxxxxx xx xxxxx what xxx the xxxxxxxx net returns on xxxx xxxxx xx xxx a xxxxxxx xxxx that xxxx not pay taxes, xxxx x xxxxxxxxxxx paying xxx at xxxx xxx (iii) xx xxxxxxxxxx xxxx xx effective tax rate of 15% xx dividends and 10% xx capital gains? xxx xxx xxxxx xxxxxxxxxxxx xxxxxxxxxxxxx Round xxxx xxxxxxx xx 2 decimal places.)

Stock Pension Investor
Corporation xxxxxxxxxx
xxxxxxx x xxxxxx % 25.20 %
xxxxxxx % xxxxxx x 24.50 %
C 28.00 x 25.06 % 23.80 x

b.
xxxxxxx that xxxxxxxxx xxx xxx tax on xxxxxxxxx and 20% xxx on capital xxxxxx xx stocks are xxxxxx xx yield xx xxx return xxxxx tax, xxxx xxxxx A, B, xxx C each xxxx for? xxxxxx xxx expected xxxxxxxx is a xxxxx perpetuity. xxx not round intermediate xxxxxxxxxxxxx Round your answers xx x decimal places.)

Stock P0
A $ 224.00
B 182.00
C 140.00


Buy this answer

Try it before you buy it
Check plagiarism for $2.00