Komiko Tanaka invests $23,.000 in LymaBean, Inc. LymaBean does not pay any divid

Question

Komiko Tanaka invests $23,.000 in LymaBean, Inc. LymaBean does not pay any dividends, Komiko projects that her investment will generate a 10 percent before-tax rate of return. She plans to invest for the long term a. How much cash will Komiko retain, after-taxes, if she holds the investment for 5 years and then she sells it when the long-tenm capital gains rate is 15 percent? (Do not round your intermediate calculations. Round your final answer to the nearest whole dollar amount.) Answer is complete and correct. s 34935 b. What is Komil o's afher-tax rate of return on her investment in part (a? (Do not round your intermediate calculations. Round your percentage answer to 2 decimal places Answer is complete and correct. c. How much cash will Komko retain, after taxes, if she holds the investment for 5 years and then sells when the long-term capital gains rate is 25 percent? (Do not round your intermediate calculations. Round your final answer to the nearest whole dollar 3 5

Explanation / Answer

Part-e: Computation of Cash Retained after Tax Amount Received ($23000*(1.10)^15) $96,077.00 Basis in Stock -$23,000.00 long term Capital Gain $73,077.00 Tax Rate 15% Tax on Gain $10,961.55 Cash Retained =$96077-10961.55=$85115.45 Part-F: Cmoputation of After tax Return on Investment ($85115.45/23000)^1/15-1=9.163%

Related Questions

Navigate

• Browse (All)
• Browse K
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.