Suppose you are a rational investor and looking at the following tax rates: Year Capital Gains Rate Ordinary Income Rate Dividend Rate 1997-2000 20% 40% 40% 2001-2002 20% 39% 39% 2003-2012 15% 35% 15% (The 2012 tax rates were revised in 2013 by the U.S. Congress, and signed into law by the President, but that is for information only). The tax rates shown are for financial assets held for one year or more. For assets held less than one year, capital gains are taxed at the ordinary income tax rate (currently 35% for the highest bracket); the same is true for dividends if the assets are held for less than 61 days. Your assignment: What is the effective dividend tax rate for a buy and hold individual investor in 2006 ? Show all of your calculations.