A year ago, Frank Figgs bought 10,000 shares of ABC Corporation’s stock for $35 per share. The firm recently paid a dividend of $0.20 per share and, in addition, the firm recently announced a stock repurchase program. After receiving the dividends on his 10,000 shares, Mr. Figgs sold 50 shares back to the company for $40 per share. Mr. Figgs is subject to a 15%personal tax rate on both dividends and capital gains. How much in personal taxes will Mr. Figgs pay on the dividends he received? How much in personal taxes will Mr. Figgs pay on his capital gain? Please show you work.
A. Dividend tax = $300; capital gains tax= $37.50
B. Dividend tax = $300; capital gains tax= $300
C. Dividend tax=$100;capital gains tax =$300
D. Dividend tax =$100;capital gains tax =$75.50
E. None of the above.