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What is the difference between the two options

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Reference no: EM132687040

You purchased CSH stock for $40 and it is now selling for $50. The company has announced that it plans a $10 special dividend.

a. Assuming 2010 tax rates, if you sell the stock or wait and receive the dividend, will you have different after-tax income?

b. If the capital gains tax rate is 20% and the dividend tax rate is 40%, what is the difference between the two options in part (a)?

Reference no: EM132687040

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