Capital gains tax rate

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Reference no: EM13962924

The following table is a list of all of the stocks that you have in your stock portfolio. The original purchase price, current price and your best guess for the "anticipated" price (one year into the future) is given below: 

 

 

Share Price ($)

Stock #

Shares Owned

Purchase

Current

Expected In One Year

1

234

20

30

36

2

272

25

34

39

3

106

30

43

42

4

452

35

47

45

5

486

40

49

51

6

359

45

53

55

7

345

50

60

63

8

419

55

62

64

9

255

60

64

66

10

264

65

66

70

Assume that the capital gains tax rate on long term profits is 20%. In addition, selling shares incurs a transaction cost of 1% of the sale proceeds. 

Suppose that you need at least $30,000 in cash today. As such, you must sell off some of your stocks. 

Create an integer linear program that tells you how many shares of which stock to sell in order to get the cash you need such that the anticipated future portfolio value of the remaining stocks is maximized.

Reference no: EM13962924

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