$30 per share, holds the shares for 5 years, and sells them for $65. (Hint: Find the holding period return and divide the number of years in the holding period.) The annualized rate of return is ☐ %. (Round to two decimal places.) What is his after-tax rate of return if he is in the 25 percent marginal tax bracket? The tax due is $. (Round to the nearesircent.) The after-tax rate of return is %. (Round to two decimal places.)

$30 per share, holds the shares for 5 years, and sells them for $65. (Hint: Find the holding period return and divide the number of years in the holding period.) The annualized rate of return is ☐ %. (Round to two decimal places.) What is his after-tax rate of return if he is in the 25 percent marginal tax bracket? The tax due is $. (Round to the nearesircent.) The after-tax rate of return is %. (Round to two decimal places.)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Noah invests $600 at the end of each quarter for 30 years in an account paying 5.64% interest compounded quarterly and then he retires. Suppose that he was in the 15% bracket when the deposits were made and interest was earned. Suppose his tax bracket is now 33% in retirement. Find the current after-tax value of Noah's account if it was set-up as (i) a Traditional Individual Retirement Account (IRA): $ (ii)a Roth Individual Retirement Account (Roth-IRA): $
Billy is reviewing his investment transactions for the year and determines he has net short-term capital gains of $9,200 and net long-term capital losses of $6,200. Below is Billy's tax information: Billy"s tax bracket = 25% !3! Long-term capital Gains tax rate 15% On the above situation, what are the taxes owed (or saved) in the current tax year for Billy ? Enter your answer below as a whole number and without any $ signs. 24
Your retired client has accumulated investment and retirement assets. He is happy with an after - tax lifestyle of $ 165,000 a year at the end of the year for 18 years. Leaving aside issues of inflation, his assets can will earn after-tax interest rate of 10.90 percent per year compounded annually. How much has your client accumulated? Round the answer to two decimal places. Your Answer:
Mr. Kuri made a money market placement of 1m for 45days at 7.5 If the withholding tax is 20% how much is the net interest that he will receive at the end of the period? Compute for the actual interest rate after tax.
Someone in the 15 percent tax bracket can earn 8 percent annually on his investments in a tax-exempt IRA account.Now let’s assume the 8 percent investment is taxable rather than tax-deferred. What will be the after-tax value of his $10,000 investment after five years (assuming annual compounding)?
If you are age 25, single, wage income of $50,000, 401(k) at work, and invest $1,000 into a Roth IRA, what is your spending power at age 70? Assume your tax rate now is 15%, your tax rate in retirement is 20%, and the pretax annual return on the investment is 5%. a.) $7,188 b.) $7,637 c.) $8,985
Carmen Santiago decided to invest $12,000 in shares of the AT&T company that pays her 5% in dividends each year. In 5 years, he will sell the shares for market value, which he estimates will have increased in value by 1% of their original value. The combined marginal tax rate that applies to you is 39%. If the inflation rate is 6%, determine: a) The internal rate of return before taxes, ignoring inflation b) The internal rate of return after taxes, ignoring inflation c) The internal rate of return after taxes, taking into account inflation
Mahenterin Inc. is expecting to pay $1.23, $0.99, and $1.13 in annual dividends for the next three years respectively. After that, it projects that dividends will increase by 1.5% annually. Andy is in the 25% marginal tax bracket and wants to earn 6% after-tax on his investments. How much is Andy willing to pay today for one share of Mahenterin Inc. stock? Multiple Choice $16.90 $17.04 $17.31 $17.36 $17.81
You are single and earns and income of $80,000 a year. Recently, you sold stocks that you had held longer than a year for a gain of $10,000. How much tax will you pay on this gain?
Someone in the 36 percent tax bracket can earn 7 percent annually on her investments in a tax-exempt IRA account. What will be the value of a one-time $18,000 investment in 5 years? 10 years? 20 years? You may use Appendix C to answer the questions. Do not round intermediate calculations. Round your answers to the nearest dollar. in 5 years: $ in 10 years: $ in 20 years: $ Suppose the preceding 7 percent return is taxable rather than tax-deferred and the taxes are paid annually. What will be the after-tax value of her $18,000 investment after 5, 10, and 20 years? Do not round intermediate calculations. Round your answer
You are considering the tax consequences of investing $2,000 at the end of each year for 30 years in a tax-sheltered retirement account that will earn 9 percent annually. How much will you accumulate over 30 years if the growth in the investment remains sheltered from taxes? Round to the nearest cent. DO NOT INCLUDE COMMAS OR $. Type your response Submit
Suppose you are a manager for a certain company. You earn $50,000 per year and are in the 28% federal income tax bracket. Each year you contribute $5,500 tax free to your individual retirement account, IRA. The account earns 6% annual interest. In addition, the amount of tax that you save each year by making these "pre-tax" contributions is invested in a taxable aggressive growth mutual fund averaging 17%. (a) How much tax do you save (in $) each year by making the retirement fund contributions? $ 1540 (b) Using Table 12-1, much will the retirement fund be worth (in $) in 30 years? (Round your answer to the nearest cent.) $ 434,820.02 (c) Although the income from this investment is taxable each year, using Table 12-1, how much will the "tax savings" fund be worth (in $) in 30 years? (Round your answer to the nearest cent.) 24

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