# Calculating Margin and Taxes and Returns

1.

Carson Corporation stock sells for $ 17 per share, and you've decided to purchase as many shares as you possibly can. You have $ 31,000 available to invest. What is the maximum number of shares you can buy if the initial margin is 60 percent?

2.

You purchased a stock at the end of the prior year at a price of $ 81. At the end of this year the stock pays a dividend of $ 1.80 and you sell the stock for $ 97. What is your return for the year? Now suppose that dividends are taxed at 15 percent and long- term capital gains ( over 11 months) are taxed at 30 percent. What is your after-tax return for the year?

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#### Solution Preview

1. A margin of 60% means that you have to pay for 60% of the amount of purchase, and your broker will lend you the remaining 40%.

You have $31000, and this will be 60% of your ...

#### Solution Summary

The expert examines calculations on Margin and Taxes and Returns.