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Assume that ABC Inc. is considering an investment in the preferred stock of IBM Corporation. The preferred stock is currently selling for $100 per share
Assume that ABC Inc. is considering an investment in the preferred stock of IBM Corporation. The preferred stock is currently selling for $100 per share with a $4.50 annual dividend. ABC Inc. anticipates a one-year holding period and expects to sell the stock at $100. The corporation is at a 40% average tax rate and the annual interest rate is 8%. Calculate the after-tax rate of return.
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Accounting Information Systems Connecting Careers Systems And Analytics
Authors: Arline A. Savage, Danielle Brannock, Alicja Foksinska
1st Edition
1119744474, 9781119744474
