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

question 73

Multiple Choice

A corporation recently purchased some preferred stock that has a before-tax yield of 8.00%.The company has a tax rate of 25%.What is the after-tax return on the preferred stock? Assume a 50% dividend exclusion for tax on dividends.(Round your final answer to two decimal places. )

• A) 6.30%
• B) 7.00%
• C) 7.14%
• D) 7.98%
• E) 6.02%

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