The expected pretax return on three stocks is divided between dividends and capital gains in the following way: stock expected dividend expected capital gain a $0 $10 b 5 5 c 10 0 required: a. if each stock is priced at "$185", what are the expected net percentage returns on each stock to (i) a pension fund that does not pay taxes, (ii) a corporation paying tax at 21% (the effective tax rate on dividends received by corporations is 6.3%), and (iii) an individual with an effective tax rate of 10% on dividends and 5% on capital gains? b. suppose that investors pay 40% tax on dividends and 10% tax on capital gains. if stocks are priced to yield an after-tax return of 10%, what would a, b, and c each sell for? assume the expected dividend is a level perpetuity.