Two years ago, Clancy purchased 100 shares of a particular company’s stock at a price of $136.55 per share. Last year, Clancy received an annual dividend of $1.75 per share, and at the end of the year, a share of stock was trading at $140.76 per share. This year, Clancy received an annual dividend of $1.93 per share and afterward sold all 100 shares
Two years ago, Clancy purchased 100 shares of a particular company’s stock at a price of $136.55 per share. Last year, Clancy received an annual dividend of $1.75 per share, and at the end of the year, a share of stock was trading at $140.76 per share. This year, Clancy received an annual dividend of $1.93 per share and afterward sold all 100 shares
Chapter5: The Cost Of Money (interest Rates)
Section: Chapter Questions
Problem 5PROB
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Two years ago, Clancy purchased 100 shares of a particular company’s stock at a price of $136.55 per share. Last year, Clancy received an annual dividend of $1.75 per share, and at the end of the year, a share of stock was trading at $140.76 per share. This year, Clancy received an annual dividend of $1.93 per share and afterward sold all 100 shares at a price of $150.97 per share.
In the first column of the following table, enter the total annual dividends Clancy received each year, as well as the total capital gains at the end of each year.
Suppose Clancy is in the 35% tax bracket. Compute the taxes Clancy pays each year on dividends and capital gains from this investment by completing the second column in the table.
Calculating Taxes Owed on Clancy’s Investment
|
|
|
Amount
|
Taxes Owed
|
|---|---|---|---|
| Year 1 | Dividends: |
|
|
| Capital Gains: |
|
|
|
| Year 2 | Dividends: |
|
|
| Capital Gains: |
|
|
The total amount of investment income (pre taxes) that Clancy earned on this investment over the course of 2 years is___________.
The total amount that Clancy pays in taxes on income from this investment income is____________.
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