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 8.30%.

Ray Corporation bonds with a return of 10.55%.

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

The companys tax rate is 25%. Dividend exclusion is 70%. What is the after-tax return on the best investment alternative?