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Ernst Gurtenbacher is coming in to see you about his investments. He is quite concerned about the amount of taxes that he pays, as his MTR is 41%, so he would like you to demonstrate to him how different types of investment incomes are taxed differently. Calculate the after-tax percentage return that each investment would produce. A preferred stock of a Canadian public company that will pay a 5.0% dividend over the next year # A GIC that will pay 5.30% interest over the next year E A Canadian public company common share that does not pay a dividend, but is expected to realize a 4.0% increase in market value over the next year A Canadian equity mutual fund that will pay a 1.5% dividend and is also expected to realize a 2.75% increase in its NAVPS over the next year Preferred stock = 5.005% GIC=4.555% Common share = 3.950% Mutual fund = 3.885% O Preferred stock = 5.005% GIC = 4.555% Common share -3.950% Mutual fund = 3.885% Preferred stock =4.000% GIC = 3.964% Common share -3.775% Mutual fund = 3.625% O Preferred stock =3.402% GIC=3.333% Common share = 3.245% Mutual fund =3.100% Preferred stock -3.402% GIC = 3.333% Common share =3.245% Mutual fund =3.100% Preferred stock = 3.207% GIC = 3.180% Common share - 3.149% Mutual fund = 3.127% O Preferred stock = 3.175% GIC=3.085% Common share -3.040% Mutual fund =3.015% Ernst Gurtenbacher is coming in to see you about his investments. He is quite concerned about the amount of taxes that he pays, as his MTR is 41%, so he would like you to demonstrate to him how different types of investment incomes are taxed differently. Calculate the after-tax percentage return that each investment would produce. A preferred stock of a Canadian public company that will pay a 5.0% dividend over the next year # A GIC that will pay 5.30% interest over the next year E A Canadian public company common share that does not pay a dividend, but is expected to realize a 4.0% increase in market value over the next year A Canadian equity mutual fund that will pay a 1.5% dividend and is also expected to realize a 2.75% increase in its NAVPS over the next year Preferred stock = 5.005% GIC=4.555% Common share = 3.950% Mutual fund = 3.885% O Preferred stock = 5.005% GIC = 4.555% Common share -3.950% Mutual fund = 3.885% Preferred stock =4.000% GIC = 3.964% Common share -3.775% Mutual fund = 3.625% O Preferred stock =3.402% GIC=3.333% Common share = 3.245% Mutual fund =3.100% Preferred stock -3.402% GIC = 3.333% Common share =3.245% Mutual fund =3.100% Preferred stock = 3.207% GIC = 3.180% Common share - 3.149% Mutual fund = 3.127% O Preferred stock = 3.175% GIC=3.085% Common share -3.040% Mutual fund =3.015%

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