A Corporation Recently Purchased Some Preferred Stock That Has a Before-Tax

question 67

Multiple Choice

A corporation recently purchased some preferred stock that has a before-tax yield of 7%.The company has a tax rate of 38%.What is the after-tax return on the preferred stock?

• A)5.32%
• B)5.60%
• C)5.89%
• D)6.20%
• E)6.51%

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Definitions:

Muscle

Tissues in the body that can contract, allowing movement of body parts and organs.

Notochord

The notochord is a flexible rod-like structure that forms the main axis of the embryo in all chordates, providing support and defining the primitive axis of the embryo.

Mesodermal Tissue

The middle layer of embryonic tissue that develops into muscle, bone, and the circulatory system among others.

Neural Plate

The neural plate is the flat layer of embryonic cells that develops into the neural tube, eventually forming the brain and spinal cord.