What type of risks should the business consider before

Reference no: EM13620788

A small business is considering investing in high yield dividend stocks. After careful consideration, one stock stands out as being the most attractive investment that pays an 8% yield. The company has a marginal tax rate of 34% which must be taken into consideration and high yield dividend stocks must be held for a minimum of 46 days in order for 70% tax exemption to apply to the dividends earned.

a.Calculate the Dividend Capture Yield assuming the stock is held for 60 days. pls show work

b.How much would Commercial Paper after-tax yield have to be to earn the equivalent yield of the high yield dividend stock? Please show all work

c.What type of risks should the business consider before making this investment? Are there any possibilities to increase the return to offset any potential risks?

Reference no: EM13620788

Questions Cloud

What isnbspthe point estimatenbspfor the unknown : records pertaining to the hourly brown trout catch have been obtained in order to include this parameter into a

A reversibleexpansion according to the law pv2 constant : a fluid at 0.7 bar occupying 0.09 m3 iscompressed reversibly to a pressure of 3.5 bar according tothe law pvnconstant

What is the value of expected sales when no money is spent : sales 2363 2.1 advertising - 279 price - 136 unemplpyment r2 .76units of measurement sales is in product units

A wire of arbitrary shape which is confined to the x-y : a wire of arbitrary shape which is confined to the x-y plane carries a current i from point a to point b in the plane.

What type of risks should the business consider before : a small business is considering investing in high yield dividend stocks. after careful consideration one stock stands

The average thermal conductivity is 715 wmc and the heat : a chromium rod is heated by convection in a furnace at 2100 k. the radius of the rod is 5 mm and its initial

The sample of test scores is given below create a relative : the sample of test scores is given below. create a relative frequency histogram of the data with 5 classes. describe

Due to a recession expected inflation this year is only 325 : due to a recession expected inflation this year is only 3.25. however the inflation rate in year 2 and thereafter is

What is the net level premium for a 1000 face amount : what is the net level premium for a 1000 face amount three-year term policy for a 50-year-old male assuming an interest

User Account

All Pages