CHAPTER 18 PROBLEM 14

Stan Pearl owns 300 shares of Royal Optical Company stock, which he bought for $16 per share. He is in a 35 percent tax bracket. It is the first week in December, and he has already received the full cash dividend for the year of $1.20 per share. For his tax bracket, dividends are taxed at 15 percent. The stock is currently selling for $30â…›. He has decided to sell the stock and after paying broker commissions, his net proceeds will be $30 per share. His tax rate on capital gains is also 15 percent (the capital gains are long-term).
	How much in total taxes will Stan Pearl pay this year for his investment in Royal Optical Company? Consider dividend income as well as capital gains.

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