Othervariations of the plain vanilla bondsinclude zero couponbondswhichdoes notpay out interestbut interest accrues and is paid inalump sum at maturity.
If, instead, he had taken the dividends in cash, paid the taxes, and invested the rest in plain vanilla Series E U.S. Savings Bonds that were popular at the time which guaranteed a minimum annual interest of 4 percent, compounded semi-annually, tax-free the end result would have much different.