.Arash Corporation is trying to choose between three alternative investments. The three securities that the company is considering are as follows:

Tax-free municipal bonds with a return of 7.30%.

Ray Corporation bonds with a return of 10.90%.

Rez Corp. preferred stock with a return of 11.50%.

The companys tax rate is 25% and dividend exclusion rate is 70%. What is the after-tax return on the best investment alternative? Show all work.