How Share Buy-Backs Differ from Dividends: You Purchased 2,500 Shares

question 18

Multiple Choice

How share buy-backs differ from dividends: You purchased 2,500 shares of DotCom.com several years ago for $40 per share. The company is offering a buy-back for $54 per share. What is the amount of after-tax proceeds you would receive from taking part in the buy-back if capital gains are taxed at 15 per cent?

• A) $120,000
• B) $121,250
• C) $129,750
• D) $135,000

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