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The expected pretax return on three stocks is divided betweendividends and capital gains in the following way: Stock ExpectedDividend Expected Capital Gain A $0 $10 B 5 5 C 10 0 a. If eachstock is priced at $125, what are the expected net percentagereturns on each stock to (i) a pension fund that does not paytaxes, (ii) a corporation paying tax at 45% (the effective tax rateon dividends received by corporations is 10.5%), and (iii) anindividual with an effective tax rate of 10% on dividends and 5% oncapital gains? (Do not round intermediate calculations. Enter youranswers as a percent rounded to 2 decimal places.)
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