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What would have been the annualized after-tax rate of return

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Question - A taxpayer can invest $5,000 in a common stock that pays no dividends but appreciates at a rate of 8%. The taxpayer's tax rate is 30%. He plans to sell the stock after 30 years.

a. Find the after-tax accumulation and the annualized after-tax rate of return for this investment.

b. What would have been the annualized after-tax rate of return on the stock if there were a special tax rate of 20% on capital gains?

Reference no: EM133103871

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