What Would the After-Tax Yield Be on an Investment That

question 52

Multiple Choice

What would the after-tax yield be on an investment that offers a 6% fully taxable yield? Assume a marginal tax rate of 31%.

• A) 2.79%
• B) 6.48%
• C) 4.14%
• D) 7.20%
• E) 12.50%

---

Definitions:

Book-To-Market Ratio

A financial valuation metric comparing a company's book value to its market value, often used to identify undervalued stocks.

Industrial Production

A measure of the output of the industrial sector of the economy, encompassing manufacturing, mining, and utilities.

Firm Size

A measure that typically reflects a company's scale of operations, often indicated by its total revenue, assets, or number of employees.

Risk Premium

The risk premium is the extra return above the risk-free rate that investors require to compensate for the risk of holding a risky asset.