SlideShare a Scribd company logo
1 of 1
Download to read offline
Imagine that investors expect to receive a compensation of rE=10% for holding a given stock.
Imagine that the stock currently trades at 100 and that dividends are expected to grow at 5%.
Assume that the dividend at time t+1 is expected to be equal to 10 . Furthermore, assume that
dividend income is taxed at 50% and capital gains are taxed at 20%. Assume that a given
investor holds such a stock from period t to period t+1. Imagine that the price of the stock does
not change during that time. What is the after tax return generated by investor in such a scenario?
5%8%10% None of the above

More Related Content

More from watchamirpune

In Arabidopsis, you look at three closely linked traits on chromosome.pdf
 In Arabidopsis, you look at three closely linked traits on chromosome.pdf In Arabidopsis, you look at three closely linked traits on chromosome.pdf
In Arabidopsis, you look at three closely linked traits on chromosome.pdfwatchamirpune
 
Image A is best described as A plant cell during prophase An animal.pdf
 Image A is best described as A plant cell during prophase An animal.pdf Image A is best described as A plant cell during prophase An animal.pdf
Image A is best described as A plant cell during prophase An animal.pdfwatchamirpune
 
In 1930, the U.S. government attempted to help domestic firms that we.pdf
 In 1930, the U.S. government attempted to help domestic firms that we.pdf In 1930, the U.S. government attempted to help domestic firms that we.pdf
In 1930, the U.S. government attempted to help domestic firms that we.pdfwatchamirpune
 
In April 2021, the University Sub Shop had an average check of $7.25 .pdf
 In April 2021, the University Sub Shop had an average check of $7.25 .pdf In April 2021, the University Sub Shop had an average check of $7.25 .pdf
In April 2021, the University Sub Shop had an average check of $7.25 .pdfwatchamirpune
 
In 2003 and 2017 a poll asked Democratic voters about their views on .pdf
 In 2003 and 2017 a poll asked Democratic voters about their views on .pdf In 2003 and 2017 a poll asked Democratic voters about their views on .pdf
In 2003 and 2017 a poll asked Democratic voters about their views on .pdfwatchamirpune
 
In C++, the function is called at program startup. group start root m.pdf
 In C++, the function is called at program startup. group start root m.pdf In C++, the function is called at program startup. group start root m.pdf
In C++, the function is called at program startup. group start root m.pdfwatchamirpune
 
In 199746 of Americans said they did not trust the media when it co.pdf
 In 199746 of Americans said they did not trust the media when it co.pdf In 199746 of Americans said they did not trust the media when it co.pdf
In 199746 of Americans said they did not trust the media when it co.pdfwatchamirpune
 
In Canada the proportion of the population is insolvent is 0.3. You.pdf
 In Canada the proportion of the population is insolvent is 0.3. You.pdf In Canada the proportion of the population is insolvent is 0.3. You.pdf
In Canada the proportion of the population is insolvent is 0.3. You.pdfwatchamirpune
 
In Australia grassland, the summer time has minimum rainfall no rainf.pdf
 In Australia grassland, the summer time has minimum rainfall no rainf.pdf In Australia grassland, the summer time has minimum rainfall no rainf.pdf
In Australia grassland, the summer time has minimum rainfall no rainf.pdfwatchamirpune
 
In an effort to determine the immunoglobulin D (IgD) levels of a cert.pdf
 In an effort to determine the immunoglobulin D (IgD) levels of a cert.pdf In an effort to determine the immunoglobulin D (IgD) levels of a cert.pdf
In an effort to determine the immunoglobulin D (IgD) levels of a cert.pdfwatchamirpune
 
In addition, $2,476 was collected for Sandhill Company in August by t.pdf
 In addition, $2,476 was collected for Sandhill Company in August by t.pdf In addition, $2,476 was collected for Sandhill Company in August by t.pdf
In addition, $2,476 was collected for Sandhill Company in August by t.pdfwatchamirpune
 
In a recent survey conducted, a random sample of adults 18 ye.pdf
 In a recent survey conducted, a random sample of adults 18 ye.pdf In a recent survey conducted, a random sample of adults 18 ye.pdf
In a recent survey conducted, a random sample of adults 18 ye.pdfwatchamirpune
 
III. Simplify the following Boolean functions F, together with the do.pdf
 III. Simplify the following Boolean functions F, together with the do.pdf III. Simplify the following Boolean functions F, together with the do.pdf
III. Simplify the following Boolean functions F, together with the do.pdfwatchamirpune
 
In a population distribution, a score of X=54 corresponds to z=2. And.pdf
 In a population distribution, a score of X=54 corresponds to z=2. And.pdf In a population distribution, a score of X=54 corresponds to z=2. And.pdf
In a population distribution, a score of X=54 corresponds to z=2. And.pdfwatchamirpune
 
In a Poisson distribution, =3.20. (Round your answers to 4 decimal pl.pdf
 In a Poisson distribution, =3.20. (Round your answers to 4 decimal pl.pdf In a Poisson distribution, =3.20. (Round your answers to 4 decimal pl.pdf
In a Poisson distribution, =3.20. (Round your answers to 4 decimal pl.pdfwatchamirpune
 
II. X,Y have joint pdf f(x,y)=cexy,0yx1,Z=X+Y. Find pdf for Z..pdf
 II. X,Y have joint pdf f(x,y)=cexy,0yx1,Z=X+Y. Find pdf for Z..pdf II. X,Y have joint pdf f(x,y)=cexy,0yx1,Z=X+Y. Find pdf for Z..pdf
II. X,Y have joint pdf f(x,y)=cexy,0yx1,Z=X+Y. Find pdf for Z..pdfwatchamirpune
 
In a metapopulation, what purposes do source and sink population play.pdf
 In a metapopulation, what purposes do source and sink population play.pdf In a metapopulation, what purposes do source and sink population play.pdf
In a metapopulation, what purposes do source and sink population play.pdfwatchamirpune
 
In a hypothetical mouse species, brown fur (B) is completely dominant.pdf
 In a hypothetical mouse species, brown fur (B) is completely dominant.pdf In a hypothetical mouse species, brown fur (B) is completely dominant.pdf
In a hypothetical mouse species, brown fur (B) is completely dominant.pdfwatchamirpune
 
In a corpus of N documents, the word the appears in N10 of them. W.pdf
 In a corpus of N documents, the word the appears in N10 of them. W.pdf In a corpus of N documents, the word the appears in N10 of them. W.pdf
In a corpus of N documents, the word the appears in N10 of them. W.pdfwatchamirpune
 
in 2018, New York State provided funding for a group of scientists at.pdf
 in 2018, New York State provided funding for a group of scientists at.pdf in 2018, New York State provided funding for a group of scientists at.pdf
in 2018, New York State provided funding for a group of scientists at.pdfwatchamirpune
 

More from watchamirpune (20)

In Arabidopsis, you look at three closely linked traits on chromosome.pdf
 In Arabidopsis, you look at three closely linked traits on chromosome.pdf In Arabidopsis, you look at three closely linked traits on chromosome.pdf
In Arabidopsis, you look at three closely linked traits on chromosome.pdf
 
Image A is best described as A plant cell during prophase An animal.pdf
 Image A is best described as A plant cell during prophase An animal.pdf Image A is best described as A plant cell during prophase An animal.pdf
Image A is best described as A plant cell during prophase An animal.pdf
 
In 1930, the U.S. government attempted to help domestic firms that we.pdf
 In 1930, the U.S. government attempted to help domestic firms that we.pdf In 1930, the U.S. government attempted to help domestic firms that we.pdf
In 1930, the U.S. government attempted to help domestic firms that we.pdf
 
In April 2021, the University Sub Shop had an average check of $7.25 .pdf
 In April 2021, the University Sub Shop had an average check of $7.25 .pdf In April 2021, the University Sub Shop had an average check of $7.25 .pdf
In April 2021, the University Sub Shop had an average check of $7.25 .pdf
 
In 2003 and 2017 a poll asked Democratic voters about their views on .pdf
 In 2003 and 2017 a poll asked Democratic voters about their views on .pdf In 2003 and 2017 a poll asked Democratic voters about their views on .pdf
In 2003 and 2017 a poll asked Democratic voters about their views on .pdf
 
In C++, the function is called at program startup. group start root m.pdf
 In C++, the function is called at program startup. group start root m.pdf In C++, the function is called at program startup. group start root m.pdf
In C++, the function is called at program startup. group start root m.pdf
 
In 199746 of Americans said they did not trust the media when it co.pdf
 In 199746 of Americans said they did not trust the media when it co.pdf In 199746 of Americans said they did not trust the media when it co.pdf
In 199746 of Americans said they did not trust the media when it co.pdf
 
In Canada the proportion of the population is insolvent is 0.3. You.pdf
 In Canada the proportion of the population is insolvent is 0.3. You.pdf In Canada the proportion of the population is insolvent is 0.3. You.pdf
In Canada the proportion of the population is insolvent is 0.3. You.pdf
 
In Australia grassland, the summer time has minimum rainfall no rainf.pdf
 In Australia grassland, the summer time has minimum rainfall no rainf.pdf In Australia grassland, the summer time has minimum rainfall no rainf.pdf
In Australia grassland, the summer time has minimum rainfall no rainf.pdf
 
In an effort to determine the immunoglobulin D (IgD) levels of a cert.pdf
 In an effort to determine the immunoglobulin D (IgD) levels of a cert.pdf In an effort to determine the immunoglobulin D (IgD) levels of a cert.pdf
In an effort to determine the immunoglobulin D (IgD) levels of a cert.pdf
 
In addition, $2,476 was collected for Sandhill Company in August by t.pdf
 In addition, $2,476 was collected for Sandhill Company in August by t.pdf In addition, $2,476 was collected for Sandhill Company in August by t.pdf
In addition, $2,476 was collected for Sandhill Company in August by t.pdf
 
In a recent survey conducted, a random sample of adults 18 ye.pdf
 In a recent survey conducted, a random sample of adults 18 ye.pdf In a recent survey conducted, a random sample of adults 18 ye.pdf
In a recent survey conducted, a random sample of adults 18 ye.pdf
 
III. Simplify the following Boolean functions F, together with the do.pdf
 III. Simplify the following Boolean functions F, together with the do.pdf III. Simplify the following Boolean functions F, together with the do.pdf
III. Simplify the following Boolean functions F, together with the do.pdf
 
In a population distribution, a score of X=54 corresponds to z=2. And.pdf
 In a population distribution, a score of X=54 corresponds to z=2. And.pdf In a population distribution, a score of X=54 corresponds to z=2. And.pdf
In a population distribution, a score of X=54 corresponds to z=2. And.pdf
 
In a Poisson distribution, =3.20. (Round your answers to 4 decimal pl.pdf
 In a Poisson distribution, =3.20. (Round your answers to 4 decimal pl.pdf In a Poisson distribution, =3.20. (Round your answers to 4 decimal pl.pdf
In a Poisson distribution, =3.20. (Round your answers to 4 decimal pl.pdf
 
II. X,Y have joint pdf f(x,y)=cexy,0yx1,Z=X+Y. Find pdf for Z..pdf
 II. X,Y have joint pdf f(x,y)=cexy,0yx1,Z=X+Y. Find pdf for Z..pdf II. X,Y have joint pdf f(x,y)=cexy,0yx1,Z=X+Y. Find pdf for Z..pdf
II. X,Y have joint pdf f(x,y)=cexy,0yx1,Z=X+Y. Find pdf for Z..pdf
 
In a metapopulation, what purposes do source and sink population play.pdf
 In a metapopulation, what purposes do source and sink population play.pdf In a metapopulation, what purposes do source and sink population play.pdf
In a metapopulation, what purposes do source and sink population play.pdf
 
In a hypothetical mouse species, brown fur (B) is completely dominant.pdf
 In a hypothetical mouse species, brown fur (B) is completely dominant.pdf In a hypothetical mouse species, brown fur (B) is completely dominant.pdf
In a hypothetical mouse species, brown fur (B) is completely dominant.pdf
 
In a corpus of N documents, the word the appears in N10 of them. W.pdf
 In a corpus of N documents, the word the appears in N10 of them. W.pdf In a corpus of N documents, the word the appears in N10 of them. W.pdf
In a corpus of N documents, the word the appears in N10 of them. W.pdf
 
in 2018, New York State provided funding for a group of scientists at.pdf
 in 2018, New York State provided funding for a group of scientists at.pdf in 2018, New York State provided funding for a group of scientists at.pdf
in 2018, New York State provided funding for a group of scientists at.pdf
 

Recently uploaded

How to do quick user assign in kanban in Odoo 17 ERP
How to do quick user assign in kanban in Odoo 17 ERPHow to do quick user assign in kanban in Odoo 17 ERP
How to do quick user assign in kanban in Odoo 17 ERPCeline George
 
ENGLISH 7_Q4_LESSON 2_ Employing a Variety of Strategies for Effective Interp...
ENGLISH 7_Q4_LESSON 2_ Employing a Variety of Strategies for Effective Interp...ENGLISH 7_Q4_LESSON 2_ Employing a Variety of Strategies for Effective Interp...
ENGLISH 7_Q4_LESSON 2_ Employing a Variety of Strategies for Effective Interp...JhezDiaz1
 
Judging the Relevance and worth of ideas part 2.pptx
Judging the Relevance  and worth of ideas part 2.pptxJudging the Relevance  and worth of ideas part 2.pptx
Judging the Relevance and worth of ideas part 2.pptxSherlyMaeNeri
 
Solving Puzzles Benefits Everyone (English).pptx
Solving Puzzles Benefits Everyone (English).pptxSolving Puzzles Benefits Everyone (English).pptx
Solving Puzzles Benefits Everyone (English).pptxOH TEIK BIN
 
Gas measurement O2,Co2,& ph) 04/2024.pptx
Gas measurement O2,Co2,& ph) 04/2024.pptxGas measurement O2,Co2,& ph) 04/2024.pptx
Gas measurement O2,Co2,& ph) 04/2024.pptxDr.Ibrahim Hassaan
 
Atmosphere science 7 quarter 4 .........
Atmosphere science 7 quarter 4 .........Atmosphere science 7 quarter 4 .........
Atmosphere science 7 quarter 4 .........LeaCamillePacle
 
DATA STRUCTURE AND ALGORITHM for beginners
DATA STRUCTURE AND ALGORITHM for beginnersDATA STRUCTURE AND ALGORITHM for beginners
DATA STRUCTURE AND ALGORITHM for beginnersSabitha Banu
 
Employee wellbeing at the workplace.pptx
Employee wellbeing at the workplace.pptxEmployee wellbeing at the workplace.pptx
Employee wellbeing at the workplace.pptxNirmalaLoungPoorunde1
 
Computed Fields and api Depends in the Odoo 17
Computed Fields and api Depends in the Odoo 17Computed Fields and api Depends in the Odoo 17
Computed Fields and api Depends in the Odoo 17Celine George
 
Grade 9 Q4-MELC1-Active and Passive Voice.pptx
Grade 9 Q4-MELC1-Active and Passive Voice.pptxGrade 9 Q4-MELC1-Active and Passive Voice.pptx
Grade 9 Q4-MELC1-Active and Passive Voice.pptxChelloAnnAsuncion2
 
Proudly South Africa powerpoint Thorisha.pptx
Proudly South Africa powerpoint Thorisha.pptxProudly South Africa powerpoint Thorisha.pptx
Proudly South Africa powerpoint Thorisha.pptxthorishapillay1
 
ACC 2024 Chronicles. Cardiology. Exam.pdf
ACC 2024 Chronicles. Cardiology. Exam.pdfACC 2024 Chronicles. Cardiology. Exam.pdf
ACC 2024 Chronicles. Cardiology. Exam.pdfSpandanaRallapalli
 
AmericanHighSchoolsprezentacijaoskolama.
AmericanHighSchoolsprezentacijaoskolama.AmericanHighSchoolsprezentacijaoskolama.
AmericanHighSchoolsprezentacijaoskolama.arsicmarija21
 
HỌC TỐT TIẾNG ANH 11 THEO CHƯƠNG TRÌNH GLOBAL SUCCESS ĐÁP ÁN CHI TIẾT - CẢ NĂ...
HỌC TỐT TIẾNG ANH 11 THEO CHƯƠNG TRÌNH GLOBAL SUCCESS ĐÁP ÁN CHI TIẾT - CẢ NĂ...HỌC TỐT TIẾNG ANH 11 THEO CHƯƠNG TRÌNH GLOBAL SUCCESS ĐÁP ÁN CHI TIẾT - CẢ NĂ...
HỌC TỐT TIẾNG ANH 11 THEO CHƯƠNG TRÌNH GLOBAL SUCCESS ĐÁP ÁN CHI TIẾT - CẢ NĂ...Nguyen Thanh Tu Collection
 
Field Attribute Index Feature in Odoo 17
Field Attribute Index Feature in Odoo 17Field Attribute Index Feature in Odoo 17
Field Attribute Index Feature in Odoo 17Celine George
 
ROOT CAUSE ANALYSIS PowerPoint Presentation
ROOT CAUSE ANALYSIS PowerPoint PresentationROOT CAUSE ANALYSIS PowerPoint Presentation
ROOT CAUSE ANALYSIS PowerPoint PresentationAadityaSharma884161
 

Recently uploaded (20)

How to do quick user assign in kanban in Odoo 17 ERP
How to do quick user assign in kanban in Odoo 17 ERPHow to do quick user assign in kanban in Odoo 17 ERP
How to do quick user assign in kanban in Odoo 17 ERP
 
ENGLISH 7_Q4_LESSON 2_ Employing a Variety of Strategies for Effective Interp...
ENGLISH 7_Q4_LESSON 2_ Employing a Variety of Strategies for Effective Interp...ENGLISH 7_Q4_LESSON 2_ Employing a Variety of Strategies for Effective Interp...
ENGLISH 7_Q4_LESSON 2_ Employing a Variety of Strategies for Effective Interp...
 
Judging the Relevance and worth of ideas part 2.pptx
Judging the Relevance  and worth of ideas part 2.pptxJudging the Relevance  and worth of ideas part 2.pptx
Judging the Relevance and worth of ideas part 2.pptx
 
Solving Puzzles Benefits Everyone (English).pptx
Solving Puzzles Benefits Everyone (English).pptxSolving Puzzles Benefits Everyone (English).pptx
Solving Puzzles Benefits Everyone (English).pptx
 
Gas measurement O2,Co2,& ph) 04/2024.pptx
Gas measurement O2,Co2,& ph) 04/2024.pptxGas measurement O2,Co2,& ph) 04/2024.pptx
Gas measurement O2,Co2,& ph) 04/2024.pptx
 
Atmosphere science 7 quarter 4 .........
Atmosphere science 7 quarter 4 .........Atmosphere science 7 quarter 4 .........
Atmosphere science 7 quarter 4 .........
 
DATA STRUCTURE AND ALGORITHM for beginners
DATA STRUCTURE AND ALGORITHM for beginnersDATA STRUCTURE AND ALGORITHM for beginners
DATA STRUCTURE AND ALGORITHM for beginners
 
Employee wellbeing at the workplace.pptx
Employee wellbeing at the workplace.pptxEmployee wellbeing at the workplace.pptx
Employee wellbeing at the workplace.pptx
 
Computed Fields and api Depends in the Odoo 17
Computed Fields and api Depends in the Odoo 17Computed Fields and api Depends in the Odoo 17
Computed Fields and api Depends in the Odoo 17
 
Grade 9 Q4-MELC1-Active and Passive Voice.pptx
Grade 9 Q4-MELC1-Active and Passive Voice.pptxGrade 9 Q4-MELC1-Active and Passive Voice.pptx
Grade 9 Q4-MELC1-Active and Passive Voice.pptx
 
Proudly South Africa powerpoint Thorisha.pptx
Proudly South Africa powerpoint Thorisha.pptxProudly South Africa powerpoint Thorisha.pptx
Proudly South Africa powerpoint Thorisha.pptx
 
Raw materials used in Herbal Cosmetics.pptx
Raw materials used in Herbal Cosmetics.pptxRaw materials used in Herbal Cosmetics.pptx
Raw materials used in Herbal Cosmetics.pptx
 
ACC 2024 Chronicles. Cardiology. Exam.pdf
ACC 2024 Chronicles. Cardiology. Exam.pdfACC 2024 Chronicles. Cardiology. Exam.pdf
ACC 2024 Chronicles. Cardiology. Exam.pdf
 
Model Call Girl in Bikash Puri Delhi reach out to us at 🔝9953056974🔝
Model Call Girl in Bikash Puri  Delhi reach out to us at 🔝9953056974🔝Model Call Girl in Bikash Puri  Delhi reach out to us at 🔝9953056974🔝
Model Call Girl in Bikash Puri Delhi reach out to us at 🔝9953056974🔝
 
AmericanHighSchoolsprezentacijaoskolama.
AmericanHighSchoolsprezentacijaoskolama.AmericanHighSchoolsprezentacijaoskolama.
AmericanHighSchoolsprezentacijaoskolama.
 
HỌC TỐT TIẾNG ANH 11 THEO CHƯƠNG TRÌNH GLOBAL SUCCESS ĐÁP ÁN CHI TIẾT - CẢ NĂ...
HỌC TỐT TIẾNG ANH 11 THEO CHƯƠNG TRÌNH GLOBAL SUCCESS ĐÁP ÁN CHI TIẾT - CẢ NĂ...HỌC TỐT TIẾNG ANH 11 THEO CHƯƠNG TRÌNH GLOBAL SUCCESS ĐÁP ÁN CHI TIẾT - CẢ NĂ...
HỌC TỐT TIẾNG ANH 11 THEO CHƯƠNG TRÌNH GLOBAL SUCCESS ĐÁP ÁN CHI TIẾT - CẢ NĂ...
 
Field Attribute Index Feature in Odoo 17
Field Attribute Index Feature in Odoo 17Field Attribute Index Feature in Odoo 17
Field Attribute Index Feature in Odoo 17
 
ROOT CAUSE ANALYSIS PowerPoint Presentation
ROOT CAUSE ANALYSIS PowerPoint PresentationROOT CAUSE ANALYSIS PowerPoint Presentation
ROOT CAUSE ANALYSIS PowerPoint Presentation
 
Model Call Girl in Tilak Nagar Delhi reach out to us at 🔝9953056974🔝
Model Call Girl in Tilak Nagar Delhi reach out to us at 🔝9953056974🔝Model Call Girl in Tilak Nagar Delhi reach out to us at 🔝9953056974🔝
Model Call Girl in Tilak Nagar Delhi reach out to us at 🔝9953056974🔝
 
Rapple "Scholarly Communications and the Sustainable Development Goals"
Rapple "Scholarly Communications and the Sustainable Development Goals"Rapple "Scholarly Communications and the Sustainable Development Goals"
Rapple "Scholarly Communications and the Sustainable Development Goals"
 

Imagine that investors expect to receive a compensation of rE=10 for.pdf

  • 1. Imagine that investors expect to receive a compensation of rE=10% for holding a given stock. Imagine that the stock currently trades at 100 and that dividends are expected to grow at 5%. Assume that the dividend at time t+1 is expected to be equal to 10 . Furthermore, assume that dividend income is taxed at 50% and capital gains are taxed at 20%. Assume that a given investor holds such a stock from period t to period t+1. Imagine that the price of the stock does not change during that time. What is the after tax return generated by investor in such a scenario? 5%8%10% None of the above