Reference no: EM132973887

Jason, in the past 2 years, had the following transaction activities:

Year (-2)

• bought 100 shares of Company A at $30 per share

Year (-1)

• sold 50 shares of Company A at $32 per share after a dividend of $2 was declared
• bought 100 shares of Company B at $50 per share

Year 0 (now)

• sold all his holdings of both "A" and "B" shares. A shares are trading at $33/share and B shares at $52 per share after dividends on both types of shares at $2 are declared.
• Given that capital gain for Jason is taxed at 50% of realized gain and dividend tax is a 25% and Jason's regular income tax rate is at 40%:

Problem 1: The TWR ( Time Weighted Return ) for the entire 2 years is:

a. 7.8 %

b. 8.8 %

c. 9.8 %

d. 6.8 %

e. none of the above