CH14.1.a Return on Stock. Joel purchased 100 shares of stock for $35 per share.
ID: 2643758 • Letter: C
Question
CH14.1.a Return on Stock. Joel purchased 100 shares of stock for $35 per share. During the year, he received dividend checks amounting to $160. Joel recently sold the stock for $44 per share. What was Joel's return on the stock?
CH14.1.b Capital Gains Tax. Joel is in a 25 percent tax bracket. What amount of taxes will he pay on his capital gain if he held the stock for less than a year?
CH14.1.c Capital Gains Tax. How much would Joel pay for tax if he held the stock for more than a year, assuming he sold it for the same amount? (Long term capital gain)
CH14.1.d Capital Gains Tax. How much would Joel save in taxes if he held the stock for more than a year, assuming he sold it for the same amount? (Savings)
CH14.1.a Return on Stock. Joel purchased 100 shares of stock for $35 per share. During the year, he received dividend checks amounting to $160. Joel recently sold the stock for $44 per share. What was Joel's return on the stock?
CH14.1.b Capital Gains Tax. Joel is in a 25 percent tax bracket. What amount of taxes will he pay on his capital gain if he held the stock for less than a year?
CH14.1.c Capital Gains Tax. How much would Joel pay for tax if he held the stock for more than a year, assuming he sold it for the same amount? (Long term capital gain)
CH14.1.d Capital Gains Tax. How much would Joel save in taxes if he held the stock for more than a year, assuming he sold it for the same amount? (Savings)
Explanation / Answer
CH14.1.a return on the stock = (ending price - intial price) + dividends/intial price
=(44-35)+1.6/35 (1.6 is the dividend per share)
=10.6/35
=30.3%
CH14.1.b the shares are sold within a year so it wouuld be short term capital gain. Short-term capital gains are taxed at the investor's ordinary income.
capital gain is 9 per share (ending price - intial price)
total short term capital gain is 900 tax on 900 will be 25% = 225
CH14.1.c Long-term capital gains, which are gains on dispositions of assets held for more than one year, are taxed at a lower rate than short-term gains.
ax rate is 0% for the 10%