KSU Corporation

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After reading this​ chapter, it​ isn’t surprising that​ you’re becoming an investment wizard. With your newfound expertise you purchase 100 shares of KSU Corporation for ​$40.66 per share. Over the next 12 months assume the price goes up to $ 47.47 per​ share, and you receive a qualified dividend of ​$0.66 per share. What would be your total return on your KSU Corporation​ investment? Assuming you continue to hold the​ stock, calculate your​ after-tax return. How is your realized​ after-tax return different if you sell the​ stock? In both cases assume you are in the 25 percent federal marginal tax bracket and 15 percent​ long-term capital gains and qualified dividends tax bracket and there is no state income tax on investment income.

Your total rate of return on your KSU Corporation investment is _______ %. ​ (Round to two decimal​ places.)

 
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