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Stock a Has a Dividend Yield of 8% but No

question 83

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Stock A has a dividend yield of 8% but no capital gain.Stock B offers a capital gain but no dividend.If a corporate investor in the 35% tax bracket earns the same after-tax return from the two stocks,what capital gain does B offer?

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Definitions:

Team- and Group-Based Incentive System

A compensation system where rewards are based on the performance of a team or group, rather than the individual performance alone.

Gainsharing

A performance-based compensation strategy that shares the financial benefits of improved productivity, cost savings, or quality enhancements with employees.

Cost Savings

Financial savings achieved by reducing expenses, improving efficiency, or other means, usually within a business context.

Productivity Improvements

Refers to measures or initiatives implemented to increase the efficiency and effectiveness of a process or operation, enhancing the output relative to input.

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