Susan Brown Has Decided That She Would Like to Go

question 99

Essay

Susan Brown has decided that she would like to go back to school after her kids leave home in five years. To save for her education, Susan would like to invest $25,000 in an investment that provides a high return. If her marginal tax rate is 35 percent, what is Susan's after-tax rate of return for the following investment options? Qualified dividends are taxed at 15 percent.
(1) Corporate bond issued at face value with 10 percent stated interest rate payable annually.
(2) Dividend-paying stock with an annual qualifying dividend equal to 10% of her investment.
(3) Growth stock with an annual growth rate of 8 percent and no dividends paid. (Round your interim calculations to the nearest whole number)

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Definitions:

Unfair Labor Practice

Actions by employers or unions that violate the rights of employees or the organization’s rules set by labor relations boards.

NLRB

Stands for the National Labor Relations Board, an independent US federal agency responsible for enforcing US labor law in relation to collective bargaining and unfair labor practices.

Union Boycotting

A strategy used by labor unions to pressure companies or individuals by discouraging or preventing purchases of products or services.

Supreme Court

is the highest judicial body in a country, tasked with interpreting the constitution, reviewing laws, and resolving legal disputes with its decisions serving as ultimate precedents in legal matters.