(Stock repurchase and taxes) The Barryman Drilling Company is planning on repurchasing $1.08 million worth of the company's 450,000 shares of stock, which is currently trading at a price of $10.83 per share.Stan Barryman is the founder of the company and still holds 19,000 shares of company stock that he originally purchased for $8.32 per share. If Stan decides to sell 2,100 of his shares for $10.83 a share, what will behis after-tax proceeds where capital gains are taxed at 15 percent?Stan's after-tax proceeds from the sale are $. (Round to the nearest dollar.)

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Asked Dec 14, 2019
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(Stock repurchase and taxes) The Barryman Drilling Company is planning on repurchasing $1.08 million worth of the company's 450,000 shares of stock, which is currently trading at a price of $10.83 per share.
Stan Barryman is the founder of the company and still holds 19,000 shares of company stock that he originally purchased for $8.32 per share. If Stan decides to sell 2,100 of his shares for $10.83 a share, what will be
his after-tax proceeds where capital gains are taxed at 15 percent?
Stan's after-tax proceeds from the sale are $. (Round to the nearest dollar.)
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(Stock repurchase and taxes) The Barryman Drilling Company is planning on repurchasing $1.08 million worth of the company's 450,000 shares of stock, which is currently trading at a price of $10.83 per share. Stan Barryman is the founder of the company and still holds 19,000 shares of company stock that he originally purchased for $8.32 per share. If Stan decides to sell 2,100 of his shares for $10.83 a share, what will be his after-tax proceeds where capital gains are taxed at 15 percent? Stan's after-tax proceeds from the sale are $. (Round to the nearest dollar.)

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Expert Answer

Step 1

Capital gains on the sale of asset held for more than a year is the difference in the value of the stock now and value of the stock when bought.

Step 2

Price of the stock when bought (P1) = $8.32

Number of stocks to be sold (n) = 2100

Price now (P2) = $10.83

Capital gains can be calculated as below

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Capital gains = (P - P.)×n = ($10.83 – S8.32)× 2100 = $2.51x 2100 = $5271

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Step 3

After tax proceed is cal...

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After tax proceed = Capital gains - Capital gains x tax =S5271 - $5271 ×15% = $4480.35

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