Axel Reid Owns 10,000 Shares of Pearl Co

question 2

Essay

Axel Reid owns 10,000 shares of Pearl Co.purchased at an average price of $15 per share.The tax rate on both dividends and capital gains is 15%.Would Axel prefer a $2.00 per share dividend or to sell 1000 shares back to the company at $20 per share? Compute his after-tax income from each option.

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