Adam is a retail investor and decides to purchase 10 shares of Company A at a per-unit price of $20. Adam holds onto shares of Company A for two years. In that time frame, Company A  paid yearly dividends of $1 per share. After holding them for two years, Adam decides to sell all 10 shares of Company A at an ex-dividend price of $25. Adam would like to determine the rate of return during the two years he owned the shares

Q: Alex purchases 100 stocks in a company that pay dividends of $10 every year for the next 5 years.…

A: Solution: We know, present value means the value of future income in today’s terms by discounting it…

Q: On January 1, year 1, Dave received 1,100 shares of restricted stock from his employer, RRK…

A: Grant Date is the date of agreement between the employer and employee for an option to own shares.…

Q: Helen sold his personal residence for $900,000 after owning it for 3 months. His basis in the house…

A: As per the provisions of IRS rules 2021 long term capital gain tax is…

Q: Abby purchased 100 shares of her dad’s favorite stock for $25.80 per share exactly 1 year ago,…

A: Computation of total amount will receive in next year: Answer: The total amount that Abby will…

Q: On October 30, 2015, Tess bought 500 shares of ACTS stock for 640 pesos per share. On November 15,…

A: The gain or loss on the investment can be computed by finding the difference between sales price…

Q: On May 1, year 1, Anna received 7,300 shares of restricted stock from her employer, Jarbal…

A: Stock refers to the shares that the company issue to raise funds from the market by providing the…

Q: On January 1, year 1, Dave received 1,000 shares of restricted stock from his employer, RRK…

A: RRK Corporation would have to pay tax on the stocks granted to Dave on the grant date. On the…

Q: Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of…

A: Net present value is the sum of the present value of net of cash outflows and inflows discounted at…

Q: On February 1 of the current year, John learned that she inherited stock under her aunt’s will.…

A: Long  term Gain: These are the gain that  is generated from   selling capital assets owned for more…

Q: On February 1 of Year 0, John received a nonqualified stock option to purchase 100 shares of his…

A: Capital gain is the gain arise from sell of stock.

Q: ason purchased 300 shares of the hodge and mattox energy fund. Each share cost 15.15. Fifteen months…

A: The company issues its equity shares to the public to raise capital and the shareholders would be…

Q: Joseph Jones, a manager at Computer Science, Inc. (CSI), received 10,000 shares of company stock as…

A: a. Write January Call option on the CSI shares including strike price =$45 Premium for writing call…

Q: Joseph Jones, a manager at Computer Science, Inc. (CSI), received 10,000 shares of company stock as…

A: Given information in question Number of share buy  =          10000 Currently share price   =…

Q: Sarah and James Hernandez purchased 140 shares of Macy's stock at $57 a share. One year later, they…

A: Given, No. of shares = 140 Sell Price = $57 Purchase = $61 Commission paid = $8+$12 =$20 Dividend…

Q: Mark received 10 ISOs (each option gives him the right to purchase 10 shares of Hendricks…

A: Employees Stock Option Plan - Employees are provided with shares of the company at a discounted rate…

Q: On January 1, year 1, Dave received 1,000 shares of restricted stock from his employer, RRK…

A: Taxes are the amount of dues or liabilities that is to be paid by individual to government on…

Q: Cindy works for Sky Manufacturers, a public corporation. In 2010, she was offered an option to…

A: NOTE ; As per BARTLEBY guidelines, when multiple sub parts of the question are given, then first…

Q: On January 1, year 1, Dave received 1,000 shares of restricted stock from his employer, RRK…

A: The following information is given in the question: 1. No. of Shares = 1,000 shares 2. Marginal rate…

Q: rate

A: Formula for rate of return: Rate of return = Ending value of investment - Beginning value of…

Q: Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of…

A: The difference between the current value of cash flows value of cash withdrawals over time is…

Q: George recently received a great stock tip from his friend, Mason. George didn’t have any cash on…

A: As per the IRS provisions (reference to 550), any interest due towards money borrowed for investment…

Q: Carmen Santiago decided to invest $12,000 in shares of the AT&T company that pays her 5% in…

A: Internal rate of return (IRR) is a value at which PV of inflows is equal to the PV of outflows, or…

Q: Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of…

A: 1. Particular Year Cash Flows 14% Factor PV of cash flows Purchase of stock Present 13,000 1…

Q: On February 4, 2017, Jonathon Cash bought 1,000 shares of Country Corporation stock for $6,800. On…

A: When a security is sold after a holding for a time of 12 months, any profit or loss on sale the…

Q: One year ago, Richard purchased 40 shares of common stock for $10 per share. During the year, he…

A: In two ways investors can earn returns from the stock , dividend capital gains capital gains are…

Q: Conrado bought 100 shares of a stock for P50,840.00. A year later, he sold the stock for P490.20 a…

A: Time Deposit Maturity Value = Initial Investment x (1+i) Stock Investment Net Sale Value = Sale…

Q: Janae pays $10,500 for shares in a new company. She sells the shares 10 years later for $21,500.…

A: The annual return on an investment is the annual percentage rate of return expressed as a…

Q: n in Kim's account when she first purchases the stock

A: Margin-: Margin is the capital rented from a brokerage firm to buy an undertaking. It is the…

Q: George recently received a great stock tip from his friend, Mason. George didn’t have any cash on…

A: Any amount of interest due towards money borrowed for investment purposes (also known as investment…

Q: How much money are Dean's investments worth at the end of 41 years?

A: Future Value of Annuity: It shows the worth of the payments made periodically over a certain point…

Q: Peter, Brian and Marc, three brothers, were co-owners of Bug-Zappers Inc. They each owned 1,000…

A: Here discuss about the details of the capital gain taxable for the agreement between the cross…

Q: On March 1 of year 0, Fran was granted an incentive stock option (ISO) to purchase 50 shares of her…

A: Recognized gain or loss - It is a situation when an asset is sold at a price that is more than or…

Q: Carmen Santiago decided to invest $12,000 in shares of the AT&T company that pays her 5% in…

A: Here, Investment Amount is $12,000 Dividend is 5% each ear Value after 5 years is 1% increase in the…

Q: Perry purchased 100 shares of Ferro, Inc. common stock for $25 per share one year ago. During the…

A: In the given question we need to compute the realized return for perry from following details.…

Q: Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of…

A: >Net Present value or NPV analysis takes into account the present value of future cash flows to…

Q: Felice Navidad purchases 2,000 shares of NOW Technology stock at $4 inChristmas 2008. Four years…

A: Purchase Value = 2000 shares *$4 Purchase Value =$8000 Sell Value = 2000 Shares *$28 Sell Value =…

Q: On February 2, Phillips induced Miller to purchase from her fifty shares of stock in the XYZ…

A: This is the case of Fraud in the Inducement. Miller may be successful in filing lawsuit against Mrs.…

Q: John bought 1,000 shares of intel stock on October 18,2015, for $30 per share, plus a $750…

A: Introduction: An asset's cost basis is adjusted for various events that take place during its…

Q: Jessie B. purchases 450 shares of Smooth Sail Inc. for $50 per share at a time when the initial…

A: Margin trading is a facility which is provided by the broker to the investor that, investor can…

Q: An investor purchases 1,000 shares of XYZ Corp. @ $20.  A year later, she sells the shares for $26.…

A: When an investor purchases a stock, the rate of return comes in two forms, they are dividend  and…

Q: Kim opens a brokerage account and purchases 500 shares of Batliboy at OMR50 per share. She borrows…

A: Margin:- In finance, the term margin is defined as the amount of money that is borrowed from a…

Q: On January 1, year 1, Dave received 1,000 shares of restricted stock from his employer, RRK…

A: Taxes are the amount of dues or liabiltieis that are to be paid by individuals on account of income…

Q: Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of…

A: As per the question, the initial cost of investment was $ 25000Kathy expects a 13% rate of return on…

Q: Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate…

A: The investors try to earn profits by investing in a company. The investors main confusion will be…

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.