What is the minimum it of return the gold stock must pay

Reference no: EM131490617

Question: Jones. who has a federal personal income tax rate of 28 percent, holds an on stock that appreciates in value by 10 percent each year He bought the stock one year ago. Jones stock-broker now wants him to switch the oil stock for a gold stock that is equally risky. Jones has decided that if he holds on to the our stock, he will keep it only one more year and then sell it. If he sells the oil stock now, he will invest all the (after-tax) proceeds of the sale in Ale gold stock and then sell the gold stock one year from now. What is the minimum it of return the gold stock must pay for Jones to make the switch/ Relate your answer to the lock-in effect.

Reference no: EM131490617

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