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A company with a 15% tax rate buys preferred stock in another company. The preferred stock has a before-tax yield of 7.50%. Assume a 70%
A company with a 15% tax rate buys preferred stock in another company. The preferred stock has a before-tax yield of 7.50%. Assume a 70% dividend exclusion for tax on dividends. What is the preferred stocks after-tax return? (Round your final answer to two decimal places.)
Group of answer choices
7.74%
6.95%
7.16%
5.94%
7.09%
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