Use the Following Information to Answer the Question(s)below

question 48

Multiple Choice

Use the following information to answer the question(s) below.
Rearden Metals has a current stock price of $30 share,is expected to pay a dividend of $1.20 in one year,and its expected price right after paying that dividend is $33.
-Rearden's expected capital gains yield is closest to:

• A)4.0%.
• B)6.4%.
• C)8.2%.
• D)10.0%.

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Definitions:

State Tax Revenue

Funds collected by state governments through various forms of taxation, such as income tax, sales tax, and property tax, to finance public services.

Tax Reform Act

Legislation aimed at revising and simplifying the tax code, often including changes to tax rates, deductions, and credits.

Kemp-Roth Tax Cut

A significant federal tax reduction in the US that was passed in 1981, aimed at encouraging economic growth by reducing individual income tax rates.

Federal Personal Income Tax

A tax levied by the U.S. federal government on the annual income of individuals, with rates varying based on income level.