Tim Purchased a Share Ten Months Ago for $14 a Share

question 37

Multiple Choice

Tim purchased a share ten months ago for $14 a share, received a $1 dividend per share last month, and sold the share today for $16 per share. Tim has a marginal tax rate of 30%. Both capital gains for securities held more than one year and dividend income is taxed at 15%. What is Tim's after- tax holding period return? Hint: The tax rate for capital gains with the holding period less than one year is the same as the marginal tax rate.

• A) 16.1%.
• B) 14.1%.
• C) 18.2%.
• D) 15.9%.

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Definitions:

Unmotivated

Lacking the desire or willingness to take action or engage in activities.

Social Function

The roles and contributions individuals or institutions play within a society to maintain and enforce norms and to promote cohesion and stability.

Cognitive Dissonance Theory

A theory suggesting that individuals experience mental discomfort and psychological stress when holding two or more contradictory beliefs, values, or attitudes.

Attribution Theory

A psychological theory that explains how individuals pinpoint the causes of their own and others' behavior and events.