Let’s consider the dividend and the dividend yield of the Calzone Corporation. Last year, the Corporation paid a $.50 quarterly dividend which was the same dividend as the previous year.  The stock sold for $88 last year and lately the stock is selling for $100. What was the annual dividend this year? What was the dividend yield last year? What is the current dividend yield? If a New York City resident investor bought 1,000 shares of the stock at the beginning of the year for $88 and held the stock until the end of this year when the stock was selling for $100, what would be the realized return on this investment and the unrealized return on this investment? What would be the rate of return on this investment (a rate is expressed as %) Would the investor be required to pay any tax on this investment? If so, how much tax would be required if the investor’s combined federal, state and city income tax bracket was 35%.  (25% federal and 10% combined state and city.)

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
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  1. Let’s consider the dividend and the dividend yield of the Calzone Corporation. Last year, the Corporation paid a $.50 quarterly dividend which was the same dividend as the previous year.  The stock sold for $88 last year and lately the stock is selling for $100.
      • What was the annual dividend this year?
      • What was the dividend yield last year?
      • What is the current dividend yield?
  2. If a New York City resident investor bought 1,000 shares of the stock at the beginning of the year for $88 and held the stock until the end of this year when the stock was selling for $100, what would be the realized return on this investment and the unrealized return on this investment?
  3. What would be the rate of return on this investment (a rate is expressed as %)
  4. Would the investor be required to pay any tax on this investment? If so, how much tax would be required if the investor’s combined federal, state and city income tax bracket was 35%.  (25% federal and 10% combined state and city.)
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