Find the after-tax return to a corporation that buys a share of preferred stock at $48,...

Question

Question

Find the after-tax return to a corporation that buys a share of preferred stock at $48, sells it at year-end at $48, and rece

Answer 1

Answer #1

Before tax rate of return:

(S – P) +3

(48-48) +3 48

$= \frac{3}{48}$

= 0.0625

After-tax rate of return:

Hope this will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.

Answer 2

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