etting Started Imported From IE 7-Hw Problem0 Imported From Fire Domain Manager.

Question

etting Started Imported From IE 7-Hw Problem0 Imported From Fire Domain Manager. D CheapDomain.com Student angov D Problem 7-38 (LO 7-1) Hayley recenthy invested $36,000 in a public utility stock paying a 6 percent annual dividend. (Do not round Interimediete calculations. Round your enswers to the nearest whole dollar amount) a. If Hayley reinvests the annual dividend she receives net of any taxes owed on the dividend, how much will her investment be worth in six years if the dividends paid are qualfed dividends? (Hayley's marginal income tax rate 28 percent) Relerances b. What wis her investment be worth in six years i the dvidends are nonquaified? Reference Sks TOSHIBA 3 4 5 6 8 9 0 RTYUP

Explanation / Answer

a). Annual After tax return = 6 * (1-0.15) = 5.1 %

Investment value after 6 years:-

= $36000 * (1+0.051)^6

= $36000 * 1.348

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