A corporation recently purchased some preferred stock that has a before-tax yield of 9.00%. The company has a tax rate of 25%. What is the after-tax return or the preferred stock? Assume a 50% dividend exclusion for taxes on dividends. (Round your final answer to two decimal places.) a. 2.25% b. 7.88% c. 6.75% d. 4.50% e. 5.63% O Icon Key

A corporation recently purchased some preferred stock that has a before-tax yield of 9.00%. The company has a tax rate of 25%. What is the after-tax return of the preferred stock? Assume a 50% dividend exclusion for taxes on dividends, (Round your final answer to two decimal places.) a. 2.25% b. 7.88% c. 6.75% d. 4.50% e. 5.63%