Which Statement Is True Concerning the One-Year After-Tax Return on the Following

question 89

Multiple Choice

Which statement is true concerning the one-year after-tax return on the following stocks, assuming a 40% tax rate on dividends and a 20% tax rate on capital gains: Stock A is purchased for $50, offers a 5% dividend yield, and is sold for $56; Stock B is purchased for $60, offers no dividend yield, but is sold after one year for $70.

• A)Stock A's after-tax return is higher by 1.27%.
• B)Stock B's after-tax return is higher by 0.73%.
• C)Stock A's after-tax return is higher by 0.27%.
• D)Stock B's after-tax return is higher by 0.58%.

---

Definitions:

Anandh

Likely referring to the same individual previously mentioned, potentially a scholar or researcher with contributions in a specific field of study, though the lack of context prevents a precise definition.

Presumed Consent

A legal framework where individuals are assumed to have consented to certain practices (like organ donation) unless they have expressed otherwise.

Altruistic Donation

The act of giving or donating something, such as an organ, without expecting any compensation or benefit in return, motivated solely by the desire to help others.

Social Worth

The perceived value of an individual or group based on societal standards, often influencing access to resources and opportunities.