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How much cash will Komiko retain

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Question - Komiko Tanaka invests $23,500 in LymaBean, Inc. LymaBean does not pay any dividends. Komiko projects that her investment will generate a 10 percent before-tax rate of return. She plans to invest for the long term.

Required -

a. How much cash will Komiko retain, after-taxes, if she holds the investment for 5 years and then she sells it when the long-term capital gains rate is 15 percent?

b. What is Komiko's after-tax rate of return on her investment in part (a)?

c. How much cash will Komiko retain, after-taxes, if she holds the investment for 5 years and then sells when the long-term capital gains rate is 25 percent?

d. What is Komiko's after-tax rate of return on her investment in part (c)?

Reference no: EM132517082

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