What will your homemade dividend be in two years

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Question - Zozan has $2,000 of dividend income and $3,000 of capital gains in her equity investment in 2020. Her marginal tax rate is 40% and the effective tax rate is 30% for the same year. Calculate the amount of tax she'll pay on her dividend income and capital gains combined from her equity investment. Assume that she is not elligible for dividend tax credit.

You own 1,800 shares of stock in Armstrong Corporation. You will receive a $1.80 per share dividend in one year. In two years, Armstrong will pay a liquidating dividend of $80 per share. The required return on Armstrong stock is 25%. Suppose you want only $600 total in dividends the first year.

What will your homemade dividend be in two years?

Reference no: EM132849596

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