The 4,000 shares of Medco stock that Diana purchased 11½ months ago for $12 per share are now trading at $19 per share. Diana's regular marginal tax rate is 35 percent and her tax rate for long-term capital gains is 15 percent.
a. What is Diana's after-tax net cash flow if she sells the stock now?
b. What is Diana's after-tax net cash flow if she waits one month before selling the stock for $19 per share?
c. What do you recommend?