How much cash will investors have after five years under each policy?


Question Description:

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How much cash will investors have after five years under each policy? 1 answer below ยป The Regional Electric Company has $1,000 of extra cash. It can retain the cash and invest it in Treasury bills yielding 10 percent, or it can pay the cash to shareholders as a dividend. Shareholders can also invest in Treasury bills with the same yield. Suppose the corporate tax rate is 34 percent, and the individual tax rate is 28 percent. How much cash will investors have after five years under each policy? Jul 08 2014 12:38 PM

Answer

20